Why ABB's Spin-Off Could Reshape The Robotics Industry

(MENAFN- Robotics & Automation News) How and why ABB's spin-off could reshape the robotics industry

April 19, 2025 by Mark Allinson

ABB , one of the world's largest industrial automation companies, is preparing to spin off its“Robotics & Discrete Automation” division into a separate, publicly listed entity.

This strategic move aims to sharpen focus and unlock value, potentially altering the dynamics of the global robotics industry.

Huge install base

ABB's robotics division boasts a significant presence in industrial automation, with over 500,000 robots installed worldwide.

However, ABB perceives limited synergies between its robotics business and other units, such as electrification, motion, and process automation.

Peter Voser, chairman of ABB, said:“The board believes listing ABB Robotics as a separate company will optimize both companies' ability to create customer value, grow and attract talent.

“Both companies will benefit from a more focused governance and capital allocation. ABB will continue to focus on its long-term strategy, building on its leading positions in electrification and automation.”

The new company will be headquartered in Switzerland, with additional operations in Sweden and China. ABB plans to retain a significant stake post-listing, anticipated in 2025, subject to market conditions.

Big numbers

In 2024, ABB's Robotics & Discrete Automation division reported revenues of $3.21 billion, a 12 percent decline from $3.64 billion in 2023.

Operational EBITA (earnings before tax) decreased by 39 percent to $329 million in 2024, down from $536 million in the previous year.

The revenue decline was primarily driven by a slowdown in industrial automation demand and reduced volumes in key markets.

Presence in the US and China

ABB has strategically invested in local manufacturing to enhance supply chain resilience and meet regional demands:

China

In December 2022, ABB inaugurated a $150 million, 67,000 sq m robotics mega-factory in Shanghai's Kangqiao district.

This state-of-the-art facility utilizes ABB's digital and automation technologies to manufacture next-generation robots, supporting over 90 percent of sales in China.

United States

In March 2024, ABB opened a refitted robotics headquarters and manufacturing facility in Auburn Hills, Michigan.

This expansion, part of a $30 million investment in the US since 2019, aims to strengthen ABB's local-for-local production strategy and support growing demand in sectors like packaging, logistics, and healthcare.

Leaner and meaner

The spin-off aligns with a broader trend of large conglomerates simplifying their structures to enhance operational efficiency and investor transparency.

For ABB, this move allows the robotics division to attract capital from investors specifically interested in the high-growth automation sector, potentially accelerating expansion in areas such as collaborative robots and AI-powered systems.

Competitors may feel pressure to reevaluate their corporate structures. For instance, Kawasaki Heavy Industries, a diversified company producing both industrial robots and consumer products like motorcycles, might consider similar strategic realignments to stay competitive.

Risk and reward

While the spin-off presents growth opportunities, it also introduces risks, including potential duplication of overheads and added pressure to deliver short-term shareholder returns.

Market conditions in 2025 will be pivotal in determining the success of the IPO.

Evolving landscape

ABB's decision to spin off its robotics division signifies more than just corporate restructuring; it reflects a strategic bet on the future of automation.

By creating a focused, agile entity, ABB positions itself to better navigate the evolving landscape of intelligent machines, potentially setting a precedent for others in the industry.

MENAFN19042025005532012229ID1109447457