China blocks SoftBank's $5.4bn ABB robotics unit acquisition

ABB headquarters in Zurich, Switzerland. Image: ABB

Sources told the Financial Times that authorities are concerned about potential data transfers to Japan.

China has blocked SoftBank’s near-$5.4bn acquisition of ABB’s robotics unit over reported concerns around data transfers overseas.

The Swiss-Swedish robotics company, in a statement today (5 November), confirmed the move and said that it had signed an agreement to divest its robotics division from SoftBank for an enterprise value of $5.375bn.

“ABB confirms that it has been informed by SoftBank that the Office of the Working Mechanism for Foreign Investment Security Review in China has prohibited the acquisition of the ABB robotics business in China,” it said.

ABB entered China in 1994 and opened its R&D centre in Shanghai in 2005. In the years since, China has become the biggest market for ABB’s robotics unit, representing more than 90pc of its robot demands. Separately, China holds more than 97pc of the global humanoid market, while accounting for more than 85pc of global demand in the sector.

The acquisition deal, announced last October, would have seen ABB carve out its robotics business into a holding company which SoftBank planned to acquire through a subsidiary.

According to Financial Times reporting, the deal was expected to go through until last week, despite being subject to a foreign investment security review. It had cleared competition review in February and SoftBank is attempting to determine what went wrong, the report added.

Sources told the publication that a review from the National Development and Reform Commission looked into ABB’s Chinese supply chain and included a demand to retain some of the unit’s manufacturing capacity in China.

Sources further shared that Chinese authorities were concerned over potential transfers of Chinese-made assets and data to Japan for use in training AI models – including by OpenAI, which is a major part of SoftBank’s investment portfolio.

Chinese authorities, in a similar move earlier this year, blocked Meta’s $2bn-plus acquisition of Manus, an AI start-up developed by Chinese company Butterly Effect, over national security concerns.

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