Sources: China has told SoftBank it will not allow the $5.4B acquisition of ABB's robotics division to go ahead; China is the division's biggest market (David Keohane/Financial Times)
Swiss-Swedish company's unit is focused on Chinese market and has mega-factory in Pudong — China has told SoftBank it will not allow …
Chinese authorities have rejected SoftBank Group Corp.'s $5.4 billion acquisition of ABB Ltd’s robotics division, according to a report by the Financial Times on Thursday. The Japanese tech conglomerate was informed by the National Development and Reform Commission that the deal would be blocked in China. This development disrupts SoftBank CEO Masayoshi Son's plans to expand the company's presence in physical artificial intelligence.
For SoftBank, robotics is a significant aspect of its aggressive AI strategy. China represents the largest market for ABB's robotics unit.
SoftBank is now attempting to understand the reasons behind the regulatory rejection and exploring the possibility of seeking approval again. The firm's shares fell by 5% on Thursday, trailing a 0.5% decline in the Nikkei 225 index. Additionally, SoftBank faced pressure from Arm Holdings, a key component of the company's portfolio, which saw a disappointing guidance for its current quarter.
The tech conglomerate also experienced broader selling in tech and AI stocks due to the U.S. Democrats' landslide victory in the midterm elections. The Democrats have expressed their intention to impose more regulatory oversight on AI and data centers. Given SoftBank's substantial investments in OpenAI and the U.S. data center buildout, the new regulatory landscape could pose challenges for the firm.
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