Hitachi Rail to sell signalling division

[457Dabeast]

Doesn't seem to have been picked up by the railway press but Hitachi is to offer up it's signalling divisions in the UK, France, and Germany for sale.

This is in response to the Competition and Markets Authority investigation into their acquisition of Thales which it deemed would 'significantly lessen competition' in the digital signalling and metro signalling markets.

https://www.gov.uk/cma-cases/hitachi-slash-thales-merger-inquiry

Provisional Findings

8 June 2023: The CMA has provisionally found competition concerns as part of its in-depth investigation of the anticipated acquisition by Hitachi Rail, Ltd of Thales SA’s Ground Transportation Systems Business.

Provisional findings report (PDF, 2.97 MB) (12.6.23)
Appendices and Glossary (PDF, 216 KB) (12.6.23)
Summary of provisional findings (PDF, 179KB) (8.6.23)
Notice of provisional findings (PDF, 138KB) (8.6.23)
Notice possible remedies (PDF, 311KB) (8.6.23)
Press notice: Merger could mean Network Rail and TfL lose out on digital signalling options (8.6.23)

The sale proposal can be found here.

The divestment of Hitachi Rail's UK, French and German mainline signalling business (the "Mainline Divestment Business"), as summarised below...

The transfer of Hitachi Rail’s core CBTC v 6.6 (Orion) technology, comprising

• A divestment of the safety platform (which comprises the hardware and generic product software). Orion CBTC technology...
• Provision of all relevant source code, technical data, functional specifications, interfaces, source code, technical data, drawings etc with the right to use and modify the Generic Application (i.e., the set of functions and signalling principles used by the core CBTC v 6.6 (Orion) technology) 6 allowing the remedy taker to fully understand, manage and further develop the Orion solution or to build its own CBTC solution;
• A transfer of a complete development lab and a specific application working lab...

I wonder who the buyer will be?

 

[Fragezeichnen]

Interesting. When Siemens and Alsthom were told that and that they couldn't get round it by selling off rolling stock product lines they promptly cancelled the merger, because they thought it was a more valuable to part of than vehicle construction.

Wabtec literally say in their submission they want to buy it. Presumably CAF do too.

(Got to love the RMT submission too - a completely generic diatribe against privatization produced by doing a search and replace of the whichever company names they last submitted it about )

 

[zwk500]

The best answer would be GBREL, but I think we all know how unlikely that is...

Siemens may pick up the German arm. If the signalling component is being sold as a complete unit, then any of a number of rail engineering companies may be interested in it. Holding the support contracts for installed installations in the UK would presumably be a reasonable earner, if you've got the capability to acquire the company.
Interesting about splitting it into UK+FR and then DE separately.

 

[stuving]

Doesn't seem to have been picked up by the railway press but Hitachi is to offer up it's signalling divisions in the UK, France, and Germany for sale.

This is in response to the Competition and Markets Authority investigation into their acquisition of Thales which it deemed would 'significantly lessen competition' in the digital signalling and metro signalling markets.

https://www.gov.uk/cma-cases/hitachi-slash-thales-merger-inquiry


The sale proposal can be found here.


I wonder who the buyer will be?

They are not proposing to do this at the moment. The CMA has not yet made its final ruling, and this is what Hitachi propose to do if that final ruling follows the provisional one. The final paragraph makes the point:

7.1 The Parties strongly dispute the CMA's Provisional Findings that the Proposed
Transaction will result in an SLC. However, to the extent that the CMA's final decision
upholds the SLCs identified in the Provisional Findings, the Parties consider that the
Remedy Package constitutes an effective and proportional means of eliminating the
alleged SLCs.

Hitachi (and Thales) also put in a response to the provisional ruling itself, still arguing that it's nonsense.

 

[Fragezeichnen]

Interesting about splitting it into UK+FR and then DE separately.

There are currently 0 Hitachi interlocking in operation in Germany. They are currently working on a single contract to resignal a 60km single track railway, which was awarded as part of a deliberate effort to diversify suppliers rather than on merit.

Maybe I'm too pessimistic, but I suspect were everything to be offered together a potential purchaser would see the the German 'experiment' as massive potential liability than an asset - entry into a new signalling market is notoriously problematic. DB would hate it, but probably the most economically sensible solution would be for a major existing German supplier to buy the DE part, abandon the Hitachi interlocking, take over their basic design work and quickly implement their own established interlocking product instead.

 

[LNW-GW Joint]

Are we talking about the ex-Ansaldo signalling portfolio that Hitachi bought with the Italian manufacturing plant at Pistioia?
I thought this was the basis of the Cambrian and Thameslink Core ETCS implementations.
I note Italy is not one of the markets mentioned in the possible sale of the business.

 

[457Dabeast]

Are we talking about the ex-Ansaldo signalling portfolio that Hitachi bought with the Italian manufacturing plant at Pistioia?
I thought this was the basis of the Cambrian and Thameslink Core ETCS implementations.
I note Italy is not one of the markets mentioned in the possible sale of the business.

Correct, it is parts of the business that were formerly Ansaldo STS but limited to those three countries, so excludes the Italian, American, Australian etc divisions
Hitachi Rail didn't deliver Thameslink Core that was/is Siemens.

 

[LNW-GW Joint]

Correct, it is parts of the business that were formerly Ansaldo STS but limited to those three countries, so excludes the Italian, American, Australian etc divisions
Hitachi didn't deliver Thameslink Core that was/is Siemens.

So where does that leave the Traffic Management solution that Hitachi delivered to Thameslink?
This article is 8 years old, but suggests it will be a key part of Thameslink and maybe other ETCS operations.

Hitachi wins traffic management contract for Thameslink

www.railtechnologymagazine.com

Hitachi has created a subsidiary called Hitachi Information Control Systems Europe Ltd to handle the contract, bringing together TRE (which it wholly owns) and its existing Information & Telecommunications Systems and Infrastructure Systems Divisions.

 

[hwl]

So where does that leave the Traffic Management solution that Hitachi delivered to Thameslink?
This article is 8 years old, but suggests it will be a key part of Thameslink and maybe other ETCS operations.

Hitachi wins traffic management contract for Thameslink

www.railtechnologymagazine.com

It didn't work and went in several skips a while ago

 

[457Dabeast]

So where does that leave the Traffic Management solution that Hitachi delivered to Thameslink?
This article is 8 years old, but suggests it will be a key part of Thameslink and maybe other ETCS operations.

Hitachi wins traffic management contract for Thameslink

www.railtechnologymagazine.com

That subsidiary isn't mentioned in the document so perhaps isn't part of the sale.