SoftBank Weighs Carving China Out of ABB Robotics Deal as Credit Gauges Flash Warning

SoftBank Group and ABB are exploring a carve-out of the Chinese arm of ABB's robotics unit from their planned acquisition, according to a Bloomberg report citing people familiar with the discussions. Neither company has confirmed the talks. The transaction as originally conceived carries a price tag of $5.4 billion.

The manoeuvre, first floated in the press over the weekend, is being weighed as a way to keep the purchase alive after Beijing's foreign-investment security review body blocked the takeover of ABB's robotics business in China. SoftBank said on Friday that it was coordinating with ABB on the transaction. Reuters had reported a day earlier, citing ABB, that both sides were still hunting for a solution and that the deal remained uncertain.

Nothing has been settled. The carve-out is a subject of negotiation rather than a completed restructuring, and no agreement or confirmed path to approval exists. China accounts for roughly 30% of the robotics business, so ring-fencing that unit would shrink the scope of what was originally agreed — leaving SoftBank to weigh not just whether the deal can clear regulators, but on what terms the remaining operations could be picked up.

Credit Markets Sound the Alarm

The regulatory puzzle is only half the story. SoftBank's risk profile drew sharper scrutiny in debt markets on Friday, with five-year credit default swaps widening to 466 basis points — the highest since October 2022. The move intensifies questions about how the group funds itself while the fate of the ABB Robotics purchase hangs in the balance.

Its dollar bond maturing in 2032 also came under pressure, shedding 0.9 cents for its steepest one-day decline in ten weeks. The slide unfolded against a broader sell-off in AI-related equities, and selling pressure swept through Asian dollar bonds from other issuers as well. SoftBank is thus caught between company-specific strain and a wider market mood; a calmer technology sector could ease the squeeze, provided worries centred on the company itself also fade.

Investors are paying closer attention to SoftBank's borrowing to finance its stake in OpenAI, Reuters reported, amid mounting concerns about the profitability of artificial intelligence. The cost of hedging against a SoftBank default climbed in tandem.

An Unconfirmed Claim From Musk

Adding noise to an already jittery week, Elon Musk alleged on Friday that SoftBank was failing to fulfil turbine orders. Neither SoftBank nor the manufacturers involved confirmed the claim, and Musk did not name any of them. For investors it remains an unverified accusation — one that would only carry weight for the funding picture if checkable details about affected orders or counterparties emerged. The observable warning lights, for now, are in the bond and credit-default markets.

Portfolio Housekeeping Continues

Away from the turmoil, SoftBank sold a 1.56% stake in Lenskart through its investment vehicle SVF II Lightbulb (Cayman), raising Rs 1,896.2 crore. Thirteen institutional investors picked up the shares.

The stock, meanwhile, rose 3.9% on Friday. No link between that gain and the China carve-out talks has been established.

SoftBank has scheduled its second-quarter earnings presentation for the fiscal year 2026 on 10 November 2026, covering the six months ended 30 September 2026. By then, investors may know whether a workable deal structure has taken shape — and whether the credit market's mounting caution proves fleeting or fundamental.