Finmeccanica agrees to sell rail units to Hitachi.

Italian defence group Finmeccanica has agreed to sell its rail and signalling units to Japan's Hitachi in a deal it says will help it to cut net debt this year by 600 million euros ($680 million) and focus on its core business.

The two companies said in a joint statement on Tuesday that Hitachi would pay 773 million euros for a 40 percent stake Finmeccanica owns in signalling unit Ansaldo STS.

Hitachi will pay Finmeccanica 9.65 euros for each Ansaldo STS share and launch a mandatory tender offer to buy all the remaining shares. The price represents a 9.2 percent premium to the stock's closing level recently.

Hitachi will also pay 36 million euros for Finmeccanica's loss-making AnsaldoBreda train business.

Finmeccanica said it expects to reap a 250 million euro net capital gain from the deal.

For Hitachi, which relocated its rail division to London last year, the main focus of the deal is Ansaldo STS, a profitable business that would help it to sell combined carriage and signals packages as well as giving it a manufacturing presence in continental Europe.


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