Investing.com– Chinese regulators told SoftBank Group Corp. (SFTBY) they will not allow its $5.4 billion acquisition of ABB Ltd’s (SIX:ABBN) robotics division, the Financial Times reported on Thursday, citing multiple people familiar with the matter.
The Japanese tech conglomerate was informed that the deal will be blocked China’s National Development and Reform Commission, the FT report said.
The development throws a wrench into CEO Masayoshi Son’s ambitions for physical artificial intelligence. Son had outlined robotics as a major part of Softbank’s aggressive push into AI.
China is the biggest market for ABB’s robotics unit.
SoftBank stock closed almost 3% down on Thursday.
Softbank is now trying to determine what went wrong and whether it can seek approval again, the FT report said.
Shares of the Japanese firm slid 5% on Thursday, lagging a 0.5% drop in the Nikkei 225. Softbank was also pressured by an overnight drop in Arm Holdings (NASDAQ:ARM)– a crown jewel in the company’s portfolio– after the British chip designer’s current-quarter guidance underwhelmed.
The tech conglomerate was also swept up in broader selling in tech and AI stocks, especially after the U.S. Democrats swept the midterm elections and won majorities in both chambers of Congress.
The Democrats have signaled more regulatory scrutiny towards AI and data centers, with Softbank holding major exposure to the U.S. data center buildout through its massive investment in OpenAI.
Original Article
Softbank’s $5.4 bln takeover of ABB robotics unit blocked by China- FT
U.S. stock index futures slide after midterms rally as weak chip earnings weigh
Asia stocks mixed as chip rout triggers KOSPI trading halt; China outperforms
Source: finance.yahoo.com
