ABB Gears Up for Acquisitions After $5 Billion Robotics Sale
(Bloomberg) — ABB Ltd. has the appetite and firepower for acquisitions after the Swiss industrial giant agreed to sell its robotics unit to SoftBank Group Corp. for more than $5 billion.
“We have today, especially after this deal, higher power to do what we want to do,” ABB Chief Executive Officer Morten Wierod said in an interview Wednesday. The Zurich-based company unexpectedly announced the sale of its robotics business to Japan’s SoftBank for almost $5.4 billion, well above analysts’ expectations.
Wierod said that “we are moving more from a profit improvement focus at ABB, toward a growth focus” with more M&A. ABB aims to generate 1%–2% annual revenue growth through acquisitions, with a focus on electrification and automation, he said.
“We are not there yet, that’s why this is one of the areas where we want to step up,” he said. “We’re not excluding anything.”
ABB has previously considered large acquisition targets including France-based Legrand SA, the world’s biggest maker of switches and plugs for homes and offices, according to people familiar with the matter. There was informal contact between the two companies at the end of 2024, but they didn’t lead to a deal at the time, the people said.
The Swiss company reached out to the French government about its interest in a potential transaction, some of the people said, asking not to be identified because the information is private. Any deal for the Paris-listed maker of electrical and digital building equipment including for data centers would likely require the blessing of the French government. The current political turmoil in France could currently make such a move more complicated.
There are no current takeover talks or plans, and it remains to be seen whether the interest could be revived, some of the people said. Legrand, which has a market value of almost €38 billion ($44 billion), would be by far ABB’s biggest acquisition if it were to pursue a combination in the future. ABB has a market value of $136 billion after a 20% increase in the share price this year.
Representatives for ABB and Legrand declined to comment.
Legrand shares rose as much as 2.9% in Paris on Wednesday, the second-biggest gainer on France’s CAC 40 blue-chip index, to a record high.
ABB has benefited from rising demand for automation tools and investments in electrical grids — profitable business areas the CEO wants the company to increasingly focus on. Utilities are seeing greater demand for power, as companies build data centers to handle the surging use of artificial intelligence.
The value of the robotics sale was “well above” market expectations and should be taken positively, Vontobel analyst Mark Diethelm wrote in a research note Wednesday. M&A has risen as a priority for ABB’s capital allocation, though the majority of the proceeds from the robotics divestment may be used for buybacks, Diethelm said.
Zuercher Kantonalbank analyst Florian Sager said the deal was an “extremely positive surprise” and will help ABB position itself as a focused provider in high-growth, higher-margin segments. The proceeds from the sale should go toward a mix of dividends, M&A and share buybacks, according to Sager.
–With assistance from Aaron Kirchfeld and Francois de Beaupuy.
(Adds Legrand shares in 9th paragraph)
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