ABB today announced it has signed an agreement to divest its Robotics division to SoftBank Group Corp. for an enterprise value of $5.375 billion and not pursue its earlier intention to spin-off the business as a separately listed company. The transaction is subject to regulatory approvals and further customary closing conditions and is expected to close in mid-to-late 2026.
ABB has been divesting businesses for several years. I am not surprised with this. Although I am a bit surprised with SoftBank Group as the purchaser. ABB had been exploring a spin off, which would have been interesting. Perhaps ABB Robotics on its own would not have sufficient capital to build out the continuing AI integrations? Of course, robotics is the foundation of the “A” of ABB—Asea Brown-Boveri. I remember Asea booths at the early robot shows of the 1980s.
Peter Voser, Chairman of ABB, said: “SoftBank’s offer has been carefully evaluated by the Board and Executive Committee and compared with our original intention for a spin-off. It reflects the long-term strengths of the division, and the divestment will create immediate value to ABB shareholders. ABB will use the proceeds from the transaction in line with its well-established capital allocation principles. Our ambitions for ABB are unchanged and we will continue to focus on our long-term strategy, building on our leading positions in electrification and automation.”
ABB had brought in a CEO who was former GE and went on an expansion binge. He was replace, and the board immediately began disassembling the conglomerate. We’ve seen similar moves by Emerson and Rockwell Automation over the years. And Honeywell has announced a split. It’s hard to be big—and grow.
ABB CEO Morten Wierod added: “SoftBank will be an excellent new home for the business and its employees. ABB and SoftBank share the same perspective that the world is entering a new era of AI-based robotics and believe that the division and SoftBank’s robotics offering can best shape this era together. ABB Robotics will benefit from the combination of its leading technology and deep industry expertise with SoftBank’s state-of-the-art capabilities in AI, robotics and next-generation computing. This will allow the business to strengthen and expand its position as a technology leader in its field.”
Of all the market intelligence analyst firms in the space, I prefer the economic analyses of Interact Analysis. Samantha Mou, whom I’ve quoted several times, is a Senior Analyst for industrial robotics. She sent these notes:
- “The deal valued ABB Robotics at $5.4 billion, with an implied FY24 EV/EBITDA multiple of 17.2x, broadly in line with other major industrial transactions (typically 12–18x). Midea’s 15x multiple for KUKA suggests SoftBank is paying a modest premium — negligible given the current AI robotics hype cycle, where emerging players command far higher valuations.”
- “Considering the intensive competition in traditional robotics, established manufacturers like ABB will need to lead the charge in AI-driven robotics to protect their margins. However, achieving this will require significant investment. The substantial long-term R&D costs may be a key factor behind ABB’s decision to sell its robotics business.”
- “This move may push ABB’s competitors, particularly the other ‘Big 4’ players, to accelerate collaborations with AI and software companies or bring in investors, ensuring they have the resources to stay competitive in the AI-driven robotics space.”
- “SoftBank has yet to establish a successful track record in robotics investments. This deal marks its first acquisition in the industrial robotics area, and it remains to be seen whether its IT-industry culture can effectively integrate with the industrial engineering tradition at ABB Robotics.”
Speaking of SoftBank, here is the included quote fromMasayoshi Son, Chairman & CEO: “SoftBank’s next frontier is Physical AI. Together with ABB Robotics, we will unite world-class technology and talent under our shared vision to fuse Artificial Super Intelligence and robotics —driving a groundbreaking evolution that will propel humanity forward.”
Result of restructuring at ABB:
As a result of the signing of the agreement ABB will adjust its reporting structure and move to three business areas. As of the fourth quarter 2025, the Robotics division will be reported as Discontinued operations. At the same time, the Machine Automation division, which together with ABB Robotics currently forms the Robotics & Discrete Automation business area, will become a part of the Process Automation business area. Upon closing, the divestment will result in a non-operational pre-tax book gain of approximately $2.4 billion with expected cash proceeds, net of transaction costs, of approximately $5.3 billion. The expected separation costs related to the divestment are approximately $200 million, about half of which was already included in our 2025 guidance. ABB’s current best estimate of the transaction-related cash tax outflows in respect of the local business carve-out is in the range of $400 – $500 million.
ABB Robotics is a leader in its industry at the core of secular and future automation trends and as communicated previously, there are limited business and technology synergies between the ABB Robotics business and the remainder of ABB’s businesses, with different demand and market characteristics. The ABB Robotics division has a workforce of approximately 7,000. With 2024 revenues of $2.3 billion it represented about 7 percent of ABB Group revenues and had an Operational EBITA margin of 12.1 percent.
