Japanese electronics and construction giant Hitachi is buying US digital engineering services company GlobalLogic for 9.6 billion dollars (£6.9 billion).

Tokyo-based Hitachi said the acquisition of the Silicon Valley company will strengthen Hitachi’s digital operations in a wide range of businesses, including IT, energy, industry and mobility.

The firm said it will speed up efforts in the “digital transformation” of railways, energy and health care systems which are core Hitachi businesses.

GlobalLogic has more than 20,000 professionals in 14 countries, operating design studios and software product engineering centres, with revenue expected to reach about 1.2 billion dollars (£872 million) for the 2021 fiscal year.

Hitachi chief executive Toshiaki Higashihara said: “Together we will create new social, environmental and economic value for our globally expanding client companies and elevate QoL, or quality of life, for people through contributions to realize sustainable society.”

Hitachi shares plunged 7.3% in Tokyo trading.

The deal was expected to close by the end of July, subject to regulatory approval.

Companies around the world are working to adapt to the rapid digital changes going on in various industries.

The acquisition of GlobalLogic is part of Hitachi’s 2021 mid-term plan, which includes a commitment to invest one trillion yen (£6.5 billion) to strengthen the digital capabilities of the company’s sprawling businesses.