A. O. Smith agrees to sell 81 per cent of its China business to CPE
The company expects to bring approximately $80 million in cash back from China for share repurchases once the deal closes.
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A. O. Smith has agreed to sell an 81 per cent interest in its China business to CPE, a China-based alternative asset manager. The company will keep a 19 per cent stake and a long-term agreement to license its brand.
The company says the deal values the China business at approximately $400 million on a cash-free, debt-free basis. Including licensing royalties, total value is expected to exceed $500 million. A. O. Smith also expects to bring back approximately $80 million in cash it now holds in China.
The company's own figures for the first half of 2025 show China sales down 8 per cent on weak consumer demand. The sale takes the unit out of direct control by A. O. Smith. The retained stake and royalties keep some exposure to any recovery in the business. The nearer effect is the $80 million in cash, which the company intends to use for share repurchases after tax. Both the amount and the timing of that cash depend on the deal closing and on the regulatory approvals still needed.
The deal is expected to close in the first half of 2027, subject to regulatory approvals and other customary closing conditions.
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