Suryaa Business Desk: Japan’s SoftBank and Swiss engineering firm ABB are exploring alternative strategies to salvage their proposed $45,000 crore ($5.4 billion) robotics deal. The acquisition was recently halted by Chinese foreign investment regulators due to concerns regarding technology and artificial intelligence data security.
Sources indicate that both companies are considering a "carve-out" proposal, which involves separating ABB’s China business unit into an independent entity under new ownership, while selling the remaining global robotics operations to SoftBank. This move is intended to address the objections raised by Chinese regulators. China currently accounts for approximately 30 percent of ABB’s robotics revenue, and the company operates a manufacturing and research center in Shanghai.
Beyond the carve-out proposal, ABB is evaluating other alternatives, including selling its China operations to a local or third-party buyer, or executing a spin-off. Financial analysts estimate that the regulatory intervention could reduce ABB’s mergers and acquisitions capacity by half, potentially limiting it to 41,000 crore ($5 billion). Following these developments, shares of both ABB and SoftBank have experienced losses.
The Chinese government has recently intensified its scrutiny of cross-border technologies and AI data transfers, having previously halted other international deals. Discussions regarding the carve-out are in the preliminary stages, and it remains to be seen how they will progress. SoftBank is currently reviewing all legal and regulatory avenues to secure the business, which provides industrial automation services and robotics products.