ABB’s $5.38bn robotics exit: Why SoftBank’s “Physical AI” vision made the cut

Zurich-based ABB Ltd (SIX: ABBN, Nasdaq Stockholm: ABB) has agreed to divest its Robotics division to SoftBank Group Corp. (TSE: 9984) for an enterprise value of USD 5.375 billion, abandoning an earlier plan to list the unit independently. The transaction, announced on October 8, 2025, is subject to regulatory clearance and is expected to close in mid-to-late 2026.

The deal hands ABB an estimated USD 2.4 billion pre-tax book gain and around USD 5.3 billion in net cash proceeds, positioning it for potential buybacks or bolt-on acquisitions. Roughly half of the USD 200 million separation costs were already baked into ABB’s 2025 guidance, while the group expects USD 400–500 million in tax outflows related to the carve-out.

As of Q4 2025, the Robotics segment will shift into discontinued operations. ABB’s Machine Automation unit will move under its Process Automation business, simplifying the group into three core verticals.

Why did ABB walk away from the robotics spin-off despite earlier shareholder support and listing plans?

Back in April 2025, ABB’s board had unveiled an ambitious plan to spin off the Robotics business and list it as a standalone company by mid-2026. Institutional investors had initially welcomed the idea as a “pure-play exposure” to industrial automation trends.

But within months, valuations started to shift. SoftBank — already scouting for acquisitions under its “Physical AI” theme — approached ABB with an unsolicited offer, reportedly above the internal target valuation of the planned spin-off. That offer, according to market chatter, prompted ABB’s executive committee to run a dual-track process comparing IPO versus sale outcomes.

By October, ABB confirmed that SoftBank’s proposal offered higher immediate value, lower execution risk, and a faster route to liquidity. Chairman Peter Voser said the board’s evaluation showed the sale “creates immediate value to ABB shareholders,” while CEO Morten Wierod framed it as “a new home for the business” under SoftBank’s AI-driven ecosystem.

Analysts say timing mattered too. The IPO window for European industrials remains narrow amid rising yields and equity volatility. A $5 billion all-cash offer — with a 12× EBITDA multiple — was hard to turn down in that context.

How does SoftBank plan to integrate ABB Robotics into its growing “Physical AI” empire?

SoftBank has been reframing its investment thesis around the convergence of robotics, AI, and edge computing — what Masayoshi Son calls “Physical AI.” By acquiring ABB Robotics, SoftBank gains not only proprietary automation IP but also a workforce of 7,000 engineers and technicians, global manufacturing sites, and a mature customer base across automotive, electronics, and logistics.

In SoftBank’s vision, ABB Robotics will anchor a broader network of smart-machine platforms — integrating with ventures such as Berkshire Grey, AutoStore, and SoftBank Robotics. The Japanese group believes this alignment can fuse robotic hardware with generative-AI-driven reasoning systems, pushing automation beyond fixed programming into autonomous decision loops.

Son said SoftBank’s “next frontier is Physical AI,” describing the ABB acquisition as a step toward uniting robotics with artificial superintelligence. The messaging aligns with SoftBank’s post-Vision Fund reset, where it has pivoted from speculative venture bets to owning tangible assets that can commercialize AI.

However, integration will not be seamless. ABB’s B2B model and long industrial sales cycles differ from SoftBank’s fast-iterating, software-centric approach. Analysts caution that merging the two corporate cultures and aligning product roadmaps will be critical if SoftBank wants to avoid another Arm-style misalignment between innovation and monetization.

What does the transaction reveal about ABB’s evolving strategy and shareholder priorities?

With this divestment, ABB doubles down on its twin pillars — Electrification and Automation — areas that already account for over 90 percent of operating profit. Shedding Robotics removes a lower-margin, capital-intensive segment that often diluted overall group performance metrics.

At an operational EBITA margin of 12.1 percent, the robotics business lagged ABB’s group average of 17–18 percent. The sale therefore immediately enhances group margin optics and provides balance-sheet flexibility. Institutional investors see this as an intelligent portfolio optimization rather than a retreat from automation.

ABB has stated it will deploy proceeds “in line with its capital allocation principles.” Analysts expect a mix of buybacks and reinvestment in grid automation, digital energy systems, and motion control. The company’s post-deal narrative — “Engineered to Outrun” — signals a push toward scalable, software-infused industrial solutions with lighter capital intensity.

In Zurich trading, ABB shares rose around 3 percent following the announcement, while SoftBank’s stock climbed modestly on the Tokyo Stock Exchange. The market read was clear: ABB derisks; SoftBank re-gears for AI.

How are institutional investors interpreting valuation, timing, and risk around the ABB–SoftBank transaction?

Market observers classify the sale as a value crystallization event — a theme popular among European conglomerates simplifying their portfolios to unlock hidden value. For ABB, the timing was shrewd: industrial M&A valuations are peaking again on AI enthusiasm, while IPO multiples have softened.

Fund managers following ABB view the Robotics exit as accretive to shareholder returns, though some caution that recurring revenue from service contracts will vanish with the unit’s sale. Others see SoftBank’s high valuation as a validation of ABB’s robotics R&D, giving the Swiss firm a cleaner story to tell investors centered on automation software and grid tech.

For SoftBank, the acquisition revives its image as an active strategic buyer after years of Vision Fund write-downs. Yet investors remain split — some applaud Son’s renewed conviction in hard-tech, others worry about execution risk given SoftBank’s historical volatility.

In early Tokyo trading, SoftBank shares edged up 1 percent, while options data showed limited hedging, implying neutral near-term sentiment. ABB, meanwhile, trades near its 52-week highs, signaling institutional confidence in management’s capital discipline.

What lies ahead for ABB and SoftBank once regulatory reviews clear?

If approved, the deal will trigger a reshaped industrial landscape: ABB exits direct robotics manufacturing, while SoftBank becomes a major force in industrial automation. Analysts expect SoftBank to retain ABB Robotics’ brand initially, using a co-branding phase before rebranding under its “Physical AI” umbrella.

For ABB, execution will hinge on redeploying capital efficiently. The group is already scanning for acquisition targets in digital substations, electrified transport, and process automation software. Investors will watch its next quarterly call for updates on reinvestment timing and potential dividend top-ups.

SoftBank, in turn, faces a more complex challenge: scaling industrial robotics while proving AI can deliver measurable productivity gains. Analysts say this acquisition will test whether SoftBank can evolve from a venture aggregator into a genuine operating technology powerhouse.

Still, the underlying logic resonates: ABB gains liquidity and focus, while SoftBank secures a platform that ties its AI story to the physical world — a union that could define automation’s next chapter.