tech

Hitachi buys U.S. software firm GlobalLogic for $9.6 bil

6 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© 2021 AFP

©2021 GPlusMedia Inc.

6 Comments
Login to comment

Another overpriced buy from a Japanese company.

6 ( +8 / -2 )

Another overpriced buy from a Japanese company.

Yep, the same thing happened to TOLL in Australia.

https://www.ft.com/content/48a2e44e-b49a-4256-92a0-489473ceb88c

Japanese big businesses have a knack for over-purchasing stuff and failing to run any good business.

4 ( +6 / -2 )

If you can not inspire the next yourself you have to pay over prized valuations for other creative companies, get I think this one will be a dud for Hitachi. They might have to write down up to 2/3 Ed’s of the valuation within 3 years

3 ( +5 / -2 )

well, what's lumada?

-1 ( +1 / -2 )

Some are too lazy to read, or are too reluctant to take off their anti-Japan glasses for a moment to read:

"Through the acquisition, Hitachi expects the addition of GlobalLogic's advanced digital engineering capabilities, and its solid client base including major technology companies, to strengthen the digital portfolio of Lumada," Hitachi said in a press release.

They're buying market share, and drawing on GlobalLogic's capabilities. It's as simple as that.

Those calling the purchase "overpriced" conveniently reglect to mention what price they should have bought it for..... It's just another baseless anti-Japan remark.

-1 ( +4 / -5 )

Early stage purchases are wise, which is why VC gets in as early as it can. It could get in earlier, at the ideas stage, but VC is usually just an investment procedure - money in, money out. It's very difficult to make money out of ideas, as those with cash generally don't understand what you are talking about. VC often does nothing more than bankroll a faster expansion of a company that has proved its concept on a small scale and wants to grow. It has a sexy image, but it's really just spreadsheets and due diligence, not rocket science.

Buying a bunch of mature companies as if they are Lego bricks is a much more expensive way to do things and often problematic.

The much vaunted synergy can be tricky to accomplish. It can be a bit like owning a dozen pieces of a dozen different jigsaw puzzles. Nothing quite fits together.

There may also be a culture clash, when you weld Japanese executive ownership on to a Western company. It can allow Japan Inc. a short cut to operating in the Western manner. But it can also throw a massive spanner in the works, especially if the people who know the most about a company - its strengths and weaknesses, bank the vast sack of Yen they have been given and quit to buy their own covid-free island in the sun.

In some deals, a sort of corporate machismo kicks in, companies spending huge sums as an expression of capitalist virility. That usually ends badly for all concerned.

As Hillclimber says, they could just be buying market share. It's a very expensive way to do it, but if you are sitting on an enormous pile of cash, it might work. There is however a history of such purchases not working out. The larger they are, the harder it is to do any meaningful due diligence. That's why the share price went down. As well as buying all the positive possibilities, you are also buying a whole load of new risk.

1 ( +1 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites