China blocks SoftBank’s US$5.4 billion takeover of engineering group ABB’s robotics division

China's state planner has denied a US$5.4 billion (S$6.89 billion) acquisition by Japanese investor SoftBank of the robotics segment of engineering group ABB, according to the company's statement on November 5. This marks the second major deal blocked by China in 2026, following Meta's forced divestiture of its AI startup Manus acquisition.

The setback stems from Beijing's increased scrutiny of foreign investment in domestic startups developing frontier technologies, limiting SoftBank's ambitions in the robotics industry, which CEO Masayoshi Son considers crucial for its AI investment strategy. The decision was initially reported by the Financial Times on November 5, and SoftBank had anticipated the deal's approval until it received notification of the Chinese National Development and Reform Commission (NDRC) prohibition.

The NDRC scrutinizes foreign investments that may pose national security risks. SoftBank declined to comment, while the NDRC did not provide a response to the request for information. ABB's shares decreased by 1.1% in early trading following the announcement of the blocked takeover. The NDRC's concern revolves around the potential transfer of robotics data overseas for AI model training, including those developed by OpenAI, a significant investor in SoftBank.

Tensions between China and Japan have escalated due to Japanese Prime Minister Sanae Takaichi's remarks regarding Taiwan in November 2025, leading to China's restriction of critical mineral exports to Japan. ABB and SoftBank continue to engage in discussions regarding the transaction, as reported by ABB. China constitutes around 30% of ABB's robot-related business, with the company maintaining 15,000 employees across 30 local entities in China and 700 cities globally.

Following the blocked ABB deal, SoftBank's shares dropped approximately 5% before the FT report was published and ended the day at a 6.8% decrease. This development occurs less than a week after SoftBank's digital-payments subsidiary OPay abandoned its US IPO, citing a regulatory investigation by a foreign authority. OPay aimed to raise US$304 million from the IPO, pricing 16 million American depositary shares at US$19 each earlier in the day.