A. O. Smith to sell 81% of China business to CPE for $400 million plus royalties
+1 new source since this summary was written
On Oct. 27, 2026, A. O. Smith agreed to transfer an 81% interest in its China business to CPE while keeping 19%. The business is valued at approximately $400 million before licensing royalties, with total value expected to exceed $500 million. A. O. Smith will also bring back approximately $80 million held in China and plans to use after-tax proceeds and that cash for share repurchases. Completion is targeted for early 2027, subject to regulatory and other customary approvals.
Why it matters
The deal reduces A. O. Smith's ownership of its China operation while preserving a minority stake and future brand-licensing income. The company says it intends to prioritize share repurchases with the after-tax proceeds and repatriated cash after completion.
Key facts
- 1CPE will acquire an 81% equity interest in A. O. Smith's China holding company, while A. O. Smith keeps 19%. prnewswire.com
- 2The China business has an approximate cash-free, debt-free value of $400 million before the long-term licensing royalty stream, and total value including that stream is expected to exceed $500 million. prnewswire.com
- 3The transaction structure will allow A. O. Smith to repatriate approximately $80 million in cash held in China. prnewswire.com
- 4The deal is expected to close in the first half of 2027, conditional on regulatory approvals and other customary closing requirements. prnewswire.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.