China blocked SoftBank's plan to acquire ABB's domestic robotics business. Concerns about the leakage of factory data are behind the decision, and the focus is now on how the framework for the international transaction will develop.
The Chinese government is reported to have prohibited SoftBank's acquisition of ABB's robotics business, with concerns over data leakage cited as the main reason. This has brought renewed focus to discussions over the handling and ownership of data learned by robot arms operating on production lines.
ABB had been advancing a transaction that included its business in China, but the acquisition was suspended after the National Development and Reform Commission's review called for part of the manufacturing capacity to remain in China. SoftBank is considering a reapplication or restructuring of the transaction, but the timing of completion remains unclear.
The scale of ABB's China business is reported to include approximately $2.3 billion in revenue in 2024 and approximately 12,700 employees in China, while its production facility in Shanghai is also substantial. The decision is not expected to have an immediate impact on ABB's customers, but the future transfer of ownership has become uncertain.
After withdrawing the acquisition agreement valued at $5.375 billion, SoftBank, which had been seeking to acquire the business, is exploring whether to reapply and the possibility of restructuring the business. China's measure is said to be aimed at preventing data from flowing overseas and could affect transactions in other regions.