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By John Revill and Anton Bridge ZURICH/TOKYO (Reuters) -SoftBank Group has agreed to buy the robotics business of Swiss engineering group ABB in a $5.4 billion deal, as the Japanese investor forges ahead with a strategy to fuse robotics and artificial intelligence. The acquisition, announced on Wednesday, is the latest by founder and CEO Masayoshi Son to establish Softbank as a core player in the development of artificial intelligence. SoftBank pushed into humanoid robotics a decade ago with its Pepper robot but later scaled back its ambitions. Its recent investments in the sector include Berkshire Grey and AutoStore, and it also led a $40 billion funding round in ChatGPT-maker OpenAI and in March bought chip design company Ampere for $6.5 billion. SOFTBANK'S STRATEGY: MERGING AI WITH ROBOTICS "SoftBank's next frontier is Physical AI," Son said in a statement. The deal means ABB has abandoned its original decision to spin off and separately list the industrial automation business, which competes with Japan's Fanuc and Yaskawa, as well as Germany's Kuka in making factory robots. The decision is the first major move under ABB CEO Morten Wierod, who took charge last year, and follows years of struggling sales and falling profitability for the robots business. ABB's robotics division, which employs 7,000 people, generated sales of $2.3 billion last year, equivalent to 7% of ABB's total revenues. But the company saw limited crossover with the rest of its business, which focuses primarily on electrification and automation. ABB announced to shareholders in April its decision to spin off robotics but decided to sell instead because the SoftBank deal provided money immediately, Wierod told Reuters. Following the deal's announcement, Switzerland's Zuercher Kantonalbank said it had expected a valuation of slightly less than $4 billion for the robotics business under the planned spin-off. ABB shares opened 2% higher in Zurich after the sale announcement, while SoftBank's shares did not move significantly, ending the day down 2%. ABB TO FOCUS ON ELECTRIFICATION, AUTOMATION, ACQUISITIONS "We always said that robotics is a market with much higher volatility. And that's what we've seen over the years, both when it comes to growth, but also margins," Wierod said. "So it is a bit of a different market than, say, the rest of ABB today, which is focusing on electrification and automation." The transaction is expected to close in mid- to late-2026 and will generate cash proceeds of roughly $5.3 billion, ABB said. The money will be spent on developing new technology and production capacity in electrification and automation, and could also fund new acquisitions, Wierod said. "We do have firepower to also do bigger acquisitions, so we're not excluding bigger deals," Wierod said. (Reporting by John Revill and Anton Bridge; Editing by Miranda Murray, Muralikumar Anantharaman and Joe Bavier)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By John Revill and Anton Bridge ZURICH/TOKYO (Reuters) -SoftBank Group has agreed to buy the robotics business of Swiss engineering group ABB in a $5.4 billion deal, as the Japanese investor forges ahead with a strategy to fuse robotics and artificial intelligence. The acquisition, announced on Wednesday, is the latest by founder and CEO Masayoshi Son to establish Softbank as a core player in the development of artificial intelligence. SoftBank pushed into humanoid robotics a decade ago with its Pepper robot but later scaled back its ambitions. Its recent investments in the sector include Berkshire Grey and AutoStore, and it also led a $40 billion funding round in ChatGPT-maker OpenAI and in March bought chip design company Ampere for $6.5 billion. SOFTBANK'S STRATEGY: MERGING AI WITH ROBOTICS "SoftBank's next frontier is Physical AI," Son said in a statement. The deal means ABB has abandoned its original decision to spin off and separately list the industrial automation business, which competes with Japan's Fanuc and Yaskawa, as well as Germany's Kuka in making factory robots. The decision is the first major move under ABB CEO Morten Wierod, who took charge last year, and follows years of struggling sales and falling profitability for the robots business. ABB's robotics division, which employs 7,000 people, generated sales of $2.3 billion last year, equivalent to 7% of ABB's total revenues. But the company saw limited crossover with the rest of its business, which focuses primarily on electrification and automation. ABB announced to shareholders in April its decision to spin off robotics but decided to sell instead because the SoftBank deal provided money immediately, Wierod told Reuters. Following the deal's announcement, Switzerland's Zuercher Kantonalbank said it had expected a valuation of slightly less than $4 billion for the robotics business under the planned spin-off. ABB shares opened 2% higher in Zurich after the sale announcement, while SoftBank's shares did not move significantly, ending the day down 2%. ABB TO FOCUS ON ELECTRIFICATION, AUTOMATION, ACQUISITIONS "We always said that robotics is a market with much higher volatility. And that's what we've seen over the years, both when it comes to growth, but also margins," Wierod said. "So it is a bit of a different market than, say, the rest of ABB today, which is focusing on electrification and automation." The transaction is expected to close in mid- to late-2026 and will generate cash proceeds of roughly $5.3 billion, ABB said. The money will be spent on developing new technology and production capacity in electrification and automation, and could also fund new acquisitions, Wierod said. "We do have firepower to also do bigger acquisitions, so we're not excluding bigger deals," Wierod said. (Reporting by John Revill and Anton Bridge; Editing by Miranda Murray, Muralikumar Anantharaman and Joe Bavier)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Alessandro Parodi (Reuters) -Tesla's lower-priced versions of its staple Model Y SUV and Model 3 sedan face an uphill battle in the region where Elon Musk's company arguably needs help the most: Europe.  Unveiled on Tuesday, the $39,990 Model Y Standard and $36,990 Model 3 will join a European market already crowded with budget EVs, with European and Chinese brands offering more than a dozen models below $30,000 – and more to come.  That's in contrast to the United States, where only one EV, the Nissan Leaf, falls into that price range. "The competition in this market is fierce," said Sam Fiorani, vice president at research firm AutoForecast Solutions, adding the array of EVs in Europe priced below Tesla's cheaper Model Y and Model 3 could hamper their prospects. LESS COMPETITION IN US, BUT LESS OPPORTUNITY Tesla, which argues that its sometimes higher prices are justified by superior quality and features, has suffered an almost halving in its European market share to about 1.5% since 2023, when the Model Y was the region's best-selling car. Analysts attribute the decline partly to an ageing product lineup and to a backlash by some consumers against Musk for his support of far-right politicians. Tesla hopes the cheaper cars will revive sales after global deliveries fell in 2024 for the first time and are forecast to drop another 10% this year, according to Visible Alpha estimates. In the United States, the Model Y Standard's sub-$40,000 price tag will match or undercut rivals including Hyundai Motor's Ioniq 5 SUV, General Motors' Chevrolet Blazer, and Volkswagen's ID.4. Still, the U.S. EV market is expected to contract in coming quarters following the September 30 expiry of a longstanding $7,500 tax credit for buyers. Even if Tesla's cheaper cars can claw back some market share, Musk has said it could face a "few rough quarters" if overall U.S. demand stalls, as expected. In China, Tesla's new releases remain significantly more expensive than domestic rivals such as BYD Co's Yuan Plus and SAIC-GM-Wuling's mini EVs, which dominate the world's biggest EV market. DOZENS OF EVS DESCEND ON EUROPEAN SHOWROOMS In Europe, Tesla is up against many cheaper rivals, including the BYD Dolphin Surf that starts at 23,000 euros ($26,830), the Dacia Spring at 16,800 euros and the Citroen e-C3 SUV at 23,300 euros. And more are coming. Last month, Volkswagen said it planned an ID.Polo compact hatchback EV for under 25,000 euros next year. However, Pedro Pacheco, vice president of research at consultancy Gartner, said the Model Y Standard would probably be cheaper than BYD's best-selling Seal plug-in hybrid SUV. Tesla halted sales declines in some European markets in September after refreshing its Model Y with interior and exterior upgrades, helping deliver record third-quarter global deliveries. Still, analysts say its limited lineup is ageing. The Model Y, launched in 2020, remains its last mass-market new model. CHEAPER MODEL Y 'ISN'T GOING TO BREAK THE MARKET OPEN' Schmidt Automotive analyst Matthias Schmidt said the cheaper Teslas should "add more momentum" from next year, but warned that Europe's EV market is about to get much more crowded. AutoForecast Solutions projects more than 25 new EVs launching in Europe next year, with roughly a dozen more by 2027. Fiorani forecast the Model Y Standard could sustain Tesla's European sales based on current pricing information. But "it isn't going to break the market open in a way that a 30,000 euro vehicle would," he said. (Additional reporting by Abhirup Roy. Editing by Mike Colias, Nick Carey and Mark Potter)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)