China Prohibited SoftBank's ABB Robotics Acquisition in China, Putting the $5.4 Billion Deal in Doubt

China's foreign-investment security reviewers have prohibited SoftBank's acquisition of ABB's robotics business in China, ABB said on Thursday.

The prohibition covers the robotics business in China, ABB said in its statement on Thursday. ABB did not announce that the wider sale had been terminated, repriced or given a new timetable.

ABB and SoftBank "are in close dialogue and are working constructively on the transaction," ABB said. SoftBank is managing the process of obtaining regulatory approvals.

The Financial Times first reported the prohibition on Thursday, citing multiple people familiar with the matter. SoftBank declined to comment, and the National Development and Reform Commission, China's state planner, did not immediately respond to a request for comment, Reuters reported.

A deal agreed last October

ABB signed an agreement in October 2025 to divest its Robotics division to SoftBank for an enterprise value of $5.375 billion. The sale replaced ABB's earlier plan to spin off the business as a separately listed company.

The transaction was expected to close in mid-to-late 2026, subject to regulatory approvals and customary closing conditions. Robotics has been reported as discontinued operations in ABB's accounts since the fourth quarter of 2025.

The division had a workforce of approximately 7,000 people and recorded revenue of $2.3 billion in 2024. That was about 7% of ABB group revenue, and its operational EBITA margin was 12.1%.

Why China is the deal's center

China is ABB's biggest robotics market, representing around 30% of its robot-related business, Reuters reported. A prohibition there removes the largest single market from the business SoftBank agreed to buy.

The footprint is physical as well as commercial. ABB Engineering (Shanghai) is home to its global robotics headquarters and is an important research-and-development center and production base for ABB Group, according to its website, cited by Reuters.

ABB as a group has around 15,000 employees in China. That is a group-wide figure, not a robotics-only one, but it shows the scale of the presence behind the division's largest market.

What the reviewers are reported to fear

No Chinese authority has published its reasoning. The concern described in the Financial Times report was about data: robotics data being transferred overseas, where it could be used to train AI models.

Those models include OpenAI's, the Times reported, and SoftBank is a major investor in OpenAI. That explanation comes from the Times' sources, not from an official statement.

SoftBank had expected the deal to be approved until last week, the Times reported. It was then told that China's National Development and Reform Commission had prohibited the acquisition.

Europe was not the obstacle. The European Commission cleared the acquisition without conditions in March 2026, and approvals in the United States were still outstanding when the prohibition was reported, according to the Times report.

The second block this year

The case is the second major deal China has blocked this year, Reuters reported. Meta was ordered to unwind its acquisition of Manus, an artificial intelligence startup, in a deal worth more than $2 billion.

Beijing is tightening scrutiny of foreign investment in businesses developing frontier technologies, Reuters reported. Robotics sits squarely in that category: it is the hardware side of the AI race.

"SoftBank's next frontier is Physical AI," Chairman and Chief Executive Masayoshi Son said when the deal was announced last October. Reuters reported that Son has billed robotics as a core component of SoftBank's AI investment strategy.

Shares fell, but not only on this news

SoftBank shares ended Thursday down 6.8% in Tokyo. They were already down about 5% before the Financial Times report was published, Reuters reported.

By calculation, only about 1.8 percentage points of the closing fall came after the report appeared.

ABB shares were down 1.1% in morning trading after the blocked takeover was made public, Reuters reported. Zurich trading was still under way when this article was written, so no closing price is carried.

What remains unknown

Whether the global transaction can be restructured without China, repriced, or will be abandoned is unknown. Neither company has announced a revised structure, a fresh application, or a new timetable.

Why the reviewers prohibited the China acquisition, beyond the data concern described by the Times' sources, is also unknown. No official Chinese statement of reasons has been published in the sources checked.

What to watch next

Watch for a further statement from ABB or SoftBank describing what happens to the transaction now. Any restructuring would have to say what happens to the China business and its Shanghai headquarters.

Watch whether SoftBank seeks a fresh approval, or accepts conditions on data and intellectual property. Watch, too, for any published reasoning from the Chinese reviewers, which would show how far the frontier-technology scrutiny now extends.