Hitachi Said to Weigh Options for $1.6 Billion Unit Stake

(Bloomberg) -- Hitachi Ltd. is considering options to streamline its business including the potential sale of its minority stake in a transportation unit, according to people familiar with the matter.

The Japanese conglomerate is working with a financial adviser to field interest for its 40% stake in Hitachi Transport System Ltd., the people said, asking not to be identified because the matter is private. Potential buyers for the stake, worth about $1.6 billion at Hitachi Transport’s current market value, include private equity firms and industry players, the people said. 

Hitachi shares climbed as much as 3.3%, their biggest gain since Nov. 1, while Hitachi Transport Systems shares jumped more than 12% to trade at their highest on record following the news. They have risen more than 75% this year, valuing the company at $4 billion.

Considerations are preliminary and Hitachi could still decide to retain the stake, the people said. A representative for Hitachi declined to comment.

The industrial conglomerate has been overhauling its business, which extends from kitchen appliances to power grids. It has signed a string of multibillion-dollar deals including the $9.6 billion purchase of U.S. software development company GlobalLogic Inc. A $3.5 billion deal announced in April to sell a stake in Hitachi Metals Ltd. to a group led by Bain Capital has faced regulatory delays.  

Founded in 1950, Hitachi Transport’s logistics services include heavy equipment and business relocation as well as air and ocean freight and cross-border transport, according to its website. Net income in the six months through September dropped 31% from a year earlier to 9.1 billion yen, while revenue for the the same period climbed 17%, the company reported.

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