SoftBank shares slide as China blocks ABB robotics deal

SoftBank Group shares fell sharply in Tokyo on Thursday, November 5. Two things hit the stock at once. Arm Holdings ↗ 4.74%, its chip-design unit, issued an outlook that disappointed investors, and reports said China had blocked SoftBank's $5.4 billion purchase of ABB's robotics division. The stock was down about 5% before the Financial Times report came out and closed 6.8% lower, The Straits Times reported.straitstimes.com

The deal was central to Masayoshi Son's push into "physical AI," which pairs robots with artificial intelligence. China is the robotics unit's biggest market, and more than 90% of the robots it sells to Chinese customers are made in China, according to the Financial Times.ftchinese.com

Beijing's veto

China's National Development and Reform Commission, the state planner responsible for supply chain security, recently told SoftBank it would block the deal, the FT reported. Regulators were worried that robotics data could be sent overseas and used to train AI models, including those of OpenAI, in which SoftBank is a major investor, Reuters reported, citing the FT. The review also looked closely at ABB's Chinese supply chains and asked that some manufacturing stay in China, Swissinfo reported.swissinfo.ch+2

ABB later confirmed it had been told that China's Office of the Working Mechanism for Foreign Investment Security Review had "prohibited the acquisition of the ABB Robotics business in China." ABB said the two companies were "in close dialogue" and working constructively on the deal, Morningstar's Dow Jones report said. SoftBank is trying to work out what went wrong and whether it can apply again, according to the FT. The deal was agreed in October 2025 at an enterprise value of $5.375 billion. The European Commission approved it without conditions in March, InvestingLive noted. ABB shares also fell in morning trading in Zurich, The Straits Times reported.ftchinese.com+3

Arm's guidance falls short

Arm's fiscal second-quarter results beat forecasts. It earned an adjusted 52 cents per share on revenue of $1.44 billion. Its third-quarter guidance only roughly matched expectations, though: revenue of about $1.54 billion and adjusted earnings of about 56 cents per share. Its shares fell after hours on Wednesday, Investing.com reported. SoftBank owns about 90% of Arm, and Arm is the largest part of SoftBank's net asset value, so even small drops in Arm weigh directly on the parent, Investing.com noted.ca.investing.com+1

Broader AI selloff

The wider market added pressure. AI and chip stocks were sold off after Democrats won control of both chambers of Congress in the U.S. midterm elections, and the party has signaled closer scrutiny of AI and data centers, Investing.com reported. The Nikkei 225 fell steeply, with AI-linked stocks Advantest and Tokyo Electron posting large losses. The broader Topix rose as lower oil prices helped other Japanese stocks, according to Investing.com.ca.finance.yahoo.com+1