ABB Posts Record Order Intake but Rotork's €5.5bn Price Tag Leaves Investors Cold

ABB's record Q2 with $12B orders and 20.2% margin was overshadowed by its £5.5B Rotork acquisition at a 60% premium, causing shares to drop 6-7% despite raised full-year outlook.

Investors gave ABB’s blockbuster second-quarter numbers a frosty reception this week, as the Swiss industrial group’s announcement of its largest-ever acquisition — the £5.5 billion purchase of British valve specialist Rotork — overshadowed a string of record operating metrics. Shares in ABB slid around 3% on the day the deal was unveiled, and have extended losses to between 6% and 7% over the past seven trading sessions, even as the company raised its full-year outlook.

The underlying operational picture was overwhelmingly positive. Order intake surged to $12 billion on a comparable basis — a record for the group — while revenue climbed 12% to $9.5 billion. Operating EBITA jumped 20% to $1.9 billion, pushing the margin past the 20% mark for the first time in recent memory, at 20.2%. Free cash flow reached $881 million, and the return on capital employed hit 28.4%, up 390 basis points. Earnings per share came in at $0.68, an 8% improvement. Strongest of all was the Electrification segment, which posted order growth of 58%, revenue of $5.2 billion and a segment margin of 24.9%, driven in large part by triple-digit growth in data centre demand.

Yet the market’s attention was fixed on the Rotork offer. ABB is paying 503 pence per share in cash, a 60% premium over Rotork’s three-month volume-weighted average price and a 73% premium to the closing price on July 15, 2026. The enterprise value of around $5.5 billion implies a hefty valuation of 19.5 times Rotork’s 2025 EBITDA of roughly £117 million (based on the disclosed EV/EBITDA multiple and Rotork’s 24.6% operating margin on £777 million revenue). ABB’s board expects the acquisition to close in the first half of 2027, funded from its existing cash pile of around $5.8 billion, credit lines, and the expected $4.8 billion net proceeds from the sale of its Robotics division to SoftBank, which is on track to complete in the second half of 2026.

The Rotork deal is not ABB’s only strategic move this month. On July 15, it announced the acquisition of French silicon carbide specialist Advantics, aimed at strengthening its DC portfolio for industrial microgrids and e-mobility, with closing expected in the fourth quarter. ABB also continued its share buyback programme, purchasing another 34,035 shares in early July, bringing total repurchases to over 4.19 million shares. And it struck a collaboration with Roche to develop automated solutions for the “laboratory of the future.”

Analysts are split on the Rotork price tag, but most acknowledge the strategic logic. Bernstein called the acquisition “expensive” but highlighted the strong data-centre tailwinds. The Zürcher Kantonalbank said the price is “proud,” yet justified by Rotork’s high margins and the strategic upgrade to ABB’s Electrification business. Vontobel saw the deal as sensible from a strategic standpoint but criticised the 19.5 times EBITDA valuation as rich. Morgan Stanley, which rates ABB a “hold” with a price target of CHF 85, had already flagged caution in early July. On the bullish side, DZ Bank’s Robert Czerwensky reiterated a buy recommendation, noting that Rotork will give ABB meaningful additional exposure to the booming data-centre market.

The stock’s recent slide has pushed it further from its 52-week high of €96.36, set on June 22, 2026. At current levels around €84, the shares are almost 13% below that peak. Yet over the past twelve months, ABB has still gained more than 34%, a reflection of the underlying business momentum that the Rotork scepticism has temporarily muted. With the next set of quarterly results scheduled for October 15, 2026, investors will be watching closely to see whether the record order book translates into sustained revenue growth and how smoothly the integration of Rotork — and the disposal of Robotics — proceeds.