Japan's NEC buys Australian IT firms

Japanese electronics giant NEC said Wednesday it will buy two IT firms from Australia's CSG, with a report pegging the price tag at about $252 million. The move is the latest by Japanese firms as they aggressively seek mergers and acquisitions abroad, taking advantage of the yen's strength to diversify their operations and make them globally competitive. Struggling NEC, which posted a $1.39 billion annual loss, said it is acquiring CSG Services and CSG Solutions, both of which have lucrative contracts with major companies and the Australian government. "The new organisation will have the capabilities and scale to successfully compete for some of Australia's largest (information and communications technology) contracts," NEC President Nobuhiro Endo said in a statement. It said the purchase would be completed within a month or two using cash on hand, underscoring how NEC is accelerating its overseas exposure as a way to reinvigorate its business operations. In March, it agreed to buy some of the operations of US back-office services provider Convergys for about $450 million in cash. The Nikkei business daily said the CSG deal was valued at 20 billion yen ($252 million). NEC, which has announced thousands of job cuts as it looks to turn a profit, did not disclose the cost. On Tuesday trading house Marubeni said it had agreed to buy US grain giant Gavilon LLC for about $3.6 billion in the largest cross-border move by a Japanese company this year. -- Dow Jones Newswires contributed to this report --