Last Updated: April 21, 2021
It was recently announced that the Japanese tech conglomerate Hitachi has acquired the US-based digital engineering services company GlobalLogic in a deal worth $9.6 billion.
In the words of the President and CEO of Hitachi—Toshiaki Higashihara, the purpose behind this purchase is the following: “The acquisition of GlobalLogic creates an exciting new opportunity for Hitachi to expand our offerings of Lumada solutions and services, provide value to customers in their digital transformation journey, and grow our Lumada business globally.”
The internet of things represents a network of devices or “things” with the ability to communicate and exchange data for the purpose of automation (such as Smart Home, wearables, industrial internet, etc.). Lumada is Hitachi’s contribution to the internet of things market, while GlobalLogic offers digital engineering services, with a focus on chip-to-cloud software engineering.
Hitachi Focuses on Tech Offerings
With over 113 years in the business, Hitachi has become a well-known and recognizable brand. As a conglomerate, it is involved in a number of businesses, including consumer products, defense, automotive and power systems, IT systems, AI, as well as payment services (such as POS systems or other credit-card related services), among others.
Notably, Hitachi also utilizes IoT (internet of things) solutions through its platform Lumada, using it in five sectors: Mobility, Smart Life, Industry, Energy, and IT.
Wishing to shift its focus from hardware to digital services and “strengthen the digital portfolio of Lumada,” Hitachi acquired GlobalLogic—a leader in the digital engineering services market.
Founded in 2000, GlobalLogic has grown from a small Silicon Valley startup to a company with over 20,000 employees operating design studios and software product engineering centers in 14 countries. Its mission is to help its customers design and bring next-generation products into the world.
By acquiring GlobalLogic’s technologies with a $9.6 billion deal ($8.5bn for the company and $1.1bn for repaying GlobalLogic’s outstanding debt), Hitachi is hoping to leverage GlobalLogic’s design and software development as well as its hundreds of clients to elevate Lumada and strengthen its digital capabilities.
But the benefits will extend to so much more than that. In the words of Hitachi’s CEO: “Together, we will create new social, environmental, and economic value for our globally expanding client companies and elevate QOL (quality of life) for people through contributions to realize a sustainable society.”
The acquisition is set to be finalized by the end of July 2021.