UPDATE 2-Hitachi says still expects to win big UK train deal

* Expects some modifications in $11 bln UK train project

* Wants to buy IT business with $3 bln annual sales

* Possible targets include existing data centres

* No plan to change ownership structure of JV with GE

* Hitachi shares drop 3.4 pct vs Nikkei’s 1.4 pct fall
(Recasts)

By Sachi Izumi

TOKYO, June 9 (BestGrowthStock) – Japan’s Hitachi Ltd (6501.T: ) said
on Wednesday it still expects to win an order for a large train
project in Britain, but it acknowledged that some modifications
to the $11 billion deal were likely.

Hitachi shares have been under pressure in recent sessions
after media reports that the train project may be cancelled or
delayed given a spending squeeze at Britain’s transport
department. [ID:nTOE65601M]

A Hitachi consortium was chosen as a preferred bidder for the
deal in 2009.

“This project is to replace 30-year-old trains, and we don’t
expect the project itself to be scrapped,” Gaku Suzuki, head of
Hitachi’s train business, said at a company investor relations
event.

“There will probably be some modifications due to the change
in the government, but we believe we can still do it.”

Hitachi, a sprawling conglomerate which makes everything from
nuclear power plants to rice cookers, also said it wants to buy
an IT company or business that generates about $3 billion in
annual sales as part of its plans to double overseas sales in six
years.

Possible targets include existing data centres, said Junzo
Nakajima, head of Hitachi’s IT division, which is aiming to offer
comprehensive IT services in the hope that this becomes a major
business for the company.

Nakajima said Hitachi could spend hundreds of billions of yen
on the acquisition, but he declined to be more specific.

“Our information and telecommunication business generates
about 50-100 billion yen ($546 million-$1.1 billion) in cash flow
every year, so you can imagine how much we would be able to spend
on the acquisition over several years,” he said.

Hitachi also said it was not planning to change the ownership
structure of its nuclear power joint ventures with General
Electric (GE.N: ).

Earlier this month a spokesman for Hitachi said it was
reviewing the structure of its partnership with GE, as part of an
overhaul of Hitachi’s global sales network.

Koji Tanaka, head of Hitachi’s power business, said the
companies will work together more closely to expand overseas
sales. Hitachi has been leading Japan sales, while GE has been in
charge of other markets.

GE, the largest U.S. conglomerate, said at the time it had
held no talks with Hitachi about changing the ventures. They
compete with the likes of Japan’s Toshiba (6502.T: ) and France’s
Areva (CEPFi.PA: ) in nuclear power.

The companies teamed up in 2007 and set up joint ventures in
Japan and the United States. Hitachi owns 80 percent of the
Japanese venture, while GE has a 60 percent stake in the American
company, which caters to the U.S. and other overseas markets.

Hitachi shares fell 3.4 percent to 337 yen, underperforming a
1.4 percent fall in the benchmark Nikkei average (.N225: ).

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(Reporting by Sachi Izumi; Editing by Hugh Lawson)

UPDATE 2-Hitachi says still expects to win big UK train deal