SoftBank cannot acquire ABB’s robotics business in China

SoftBank wants to buy ABB’s robotics business for $5.4 billion. The Japanese technology group wants to bring artificial intelligence into factories. But China has prohibited the acquisition of the Chinese business. That puts the entire deal at stake.

SoftBank wants to combine AI with industrial robots

SoftBank founder Masayoshi Son is investing heavily in artificial intelligence. With ABB, he wants AI to control machines that work in factories.

The Swiss group brings decades of experience with industrial robots, established customers and a global sales network. SoftBank wants to combine this business with technology from its other AI and robotics investments. That is how the group describes its plan in its documents for shareholders.

With ABB, SoftBank would acquire an operating industrial business rather than having to build one itself.

China is ABB’s largest robotics market

China accounts for around 30% of the robotics business, according to Reuters. ABB also develops and manufactures robots there. More than 90% of its robots for Chinese customers are made locally, according to the Financial Times.

The change of ownership therefore also involves Chinese factories and technology developed in the country. That brings the transaction under Beijing’s foreign investment review.

The case shows how far that influence reaches: a Swiss company wants to sell its robotics division to a Japanese buyer. Its Chinese operations give Beijing a say in the decision.

Beijing is concerned about factory data

According to the Financial Times, Chinese authorities were concerned that robotics data could be transferred abroad. It could then be used to train AI models. SoftBank’s ties to OpenAI were also under scrutiny.

The review also covered supply chains and keeping manufacturing capacity in China, the report said. No official reason for the prohibition has been published.

For SoftBank, the dispute strikes at the heart of its plan: the group wants to combine industrial experience with AI. Beijing wants control over which technology and data leave the country in the process.

Can the deal be saved without the China business?

According to Bloomberg, ABB and SoftBank are now examining whether they can separate the Chinese business from the rest of the sale. This could involve creating a separate company with different owners.

SoftBank would then be buying a business with a different scope from the one originally agreed. The companies would also need a solution for the robotics division’s largest individual market. No such separation has been agreed so far.

The acquisition of the business in China has been prohibited. ABB and SoftBank have not yet called off the global sale.

This week, I spoke about opportunities in humanoid robotics at a German automotive supplier in Shanghai. The keynote and workshop covered components many suppliers already know from car manufacturing: electric motors, power electronics, bearings and batteries. For robots, these components need adapting to different requirements for weight, heat and payload. Examples from our manufacturer visits also explored how to find suitable development partners and turn initial discussions into a joint project.

For your strategy meeting or next workshop, we explain China’s robotics market and applications relevant to your industry. Enquire about a keynote or workshop.

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