SoftBank and ABB explore China carve-out to salvage robotics deal
SoftBank and ABB are considering separating ABB Robotics' Chinese business to overcome a Chinese government block on their $5.4bn deal. The Chinese unit is the firm's largest market. The effort may fail and ABB is reviewing other options, including finding a new buyer.
SoftBank and Swiss engineering group ABB are exploring ways to salvage a blocked transaction, including carving out the Chinese part of a giant robotics deal, according to people familiar with the matter, Bloomberg reported.
The two companies and their advisers are trying to find a solution after China's Office of the Working Mechanism for Foreign Investment Security Review on Thursday halted SoftBank's move to acquire the ABB unit valued at US$5.4 billion (HK$42.3 billion).
They are studying how the Chinese business, which is ABB Robotics' largest single market, could be separated out, the people said. SoftBank is leading the push, people added, asking not to be identified as the talks were private.
These efforts may fail and there's no certainty they'll result in a deal, the people said. ABB is also reviewing other options including finding another buyer, one person said, adding that the business could be potentially valued at US$2 billion to US$3 billion.
The Chinese business could be separated out and set up as a separate entity with different ownership, the people said. This aims to assuage the Chinese government's worries over data and technology.
The decision came as a surprise to Switzerland's ABB, which expected the robotics divestment to be closed by the end of the year, the people said.
This is the second deal blocked by the Chinese government this year. In April, China's National Development and Reform Commission blocked Meta's US$2 billion acquisition of agentic AI startup Manus, issuing a one-line notice saying it had decided to prohibit foreign investment in the startup in accordance with laws and regulations.