SoftBank and ABB Weigh China Carve-Out After Beijing Blocks $5.4 Billion Robotics Sale

What happened

SoftBank Group agreed to acquire an ABB Ltd. robotics business for $5.4 billion, but the deal was stopped by China's Office of the Working Mechanism for Foreign Investment Security Review on Thursday. The move caught ABB off guard, as the Swiss company had expected to close the divestment by year end.

People familiar with the situation said SoftBank is spearheading talks to keep the transaction alive, while ABB and SoftBank declined to comment. One person added that Masayoshi Son told SoftBank officials he did not think the transaction would need to involve Chinese authorities.

The carve-out idea and the fallback plans

One route on the table is to peel off ABB Robotics' China operations into a separate entity with different ownership. ABB Robotics' largest single market is China, and the carve-out push is aimed at easing Beijing's concerns about protecting data and technology as countries race to advance artificial intelligence.

Beijing has a say here because ABB Robotics runs a major production and development site in Shanghai that has received state support and backing from local authorities. While China did not announce a reason for blocking the sale, the country has tightened control over sending sensitive information overseas.

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Nothing is guaranteed. People involved said the carve-out could still fall apart. ABB is also reviewing other paths, including finding a different buyer, which one person said could value the business between $2 billion and $3 billion. Another fallback is to return to the original plan of spinning off the robotics unit, with Switzerland and Sweden previously eyed for listings, though that option is seen as especially tricky now that a divestment deal is already signed and sentiment for a new listing is weak.

Why it matters for your portfolio

SoftBank shares dropped 11% in Tokyo on Friday during a global tech selloff after the US midterm elections, and ABB slipped enough to leave weekly losses greater than 5%. Citigroup analyst Martin Wilkie said the China stop cuts ABB's deal-making firepower roughly in half to about $5 billion, since proceeds from a SoftBank sale were slated for other acquisitions.

The robotics division brought in $2.3 billion of revenue in 2024, about 7% of ABB's sales, and has roughly 7,000 staff based at production facilities in Sweden, the US, and China. It competes with Japan's FANUC and Yaskawa Electric, plus Kuka, owned by Midea Group. The bottom line: the block injects timing and valuation uncertainty into any handover of ABB Robotics, and that uncertainty is now part of how both ABB and SoftBank will be priced and positioned in deal discussions.

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