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Investing.com -- Swiss engineering giant ABB Ltd (SIX:ABBN) on Wednesday said that it has agreed to sell its robotics business to Japanese technology conglomerate SoftBank Group Corp. (TYO:9984) for an enterprise value of $5.38 billion, abandoning its earlier plan to spin off the unit.
ABB said the deal is expected to close by year-end and will generate about $5.3 billion in net cash proceeds. Shares of ABB are now trading higher following the announcement.
ABB’s robotics unit, which manufactures factory robots and industrial automation equipment, reported about $2.3 billion in revenue last year, representing roughly 7% of ABB’s total revenue and about 70% of the company’s Robotics & Automation division.
The division had an operating EBITA margin of 12.1%, contributing about 5.2% to ABB’s total EBITA.
The transaction implies an EV/EBITA multiple of 19.3x on 2024 earnings. ABB’s current 2025 EV/EBITA stands at 20.6x.
RBC Capital Markets noted that ABB had valued the robotics unit at roughly $3.5 billion to $4.0 billion, about 30% below the selling price, and described the sale as a “clean, lucrative exit.”
ABB said the sale will result in a book gain of about $2.4 billion pre-tax and a post-tax gain of about $2 billion, adding roughly 2% to ABB’s market value.
Separation costs are estimated at $0.2 billion, half of which were already budgeted and included in guidance. ABB expects a tax outflow of $0.4 billion to $0.5 billion, or about 19%.
Under the deal, ABB will classify robotics as a discontinued operation starting in the fourth quarter. The remaining part of the Robotics & Automation division, Machine Automation, will be integrated into ABB’s Process Automation division.
RBC Capital Markets said it welcomed the timing of the sale, the price, and the path chosen.
The brokerage said a spin-off through an initial public offering had always been the least-favourable exit path for ABB.
RBC noted that the sale ends uncertainty around the robotics unit and shows ABB’s management remains proactive in reshaping its portfolio.
SoftBank’s chief executive officer, Masayoshi Son, said the acquisition supports the company’s ambitions for “physical AI” by combining robotics and artificial intelligence capabilities.
SoftBank, known for its aggressive investments in technology, has in recent years positioned artificial intelligence as a core driver of its growth strategy.