A. O. Smith to Sell Majority Stake in China Business
China: A. O. Smith has entered into definitive agreements with China-based alternative asset manager CPE for the sale of an approximately 81% stake in its China business. Announced on 27 October 2026, the transaction values the business at approximately USD 400 million on a cash-free, debt-free basis. A. O. Smith will retain a 19% minority interest and continue to license its brand in China under a long-term agreement. Completion is expected in the first half of 2027, subject to regulatory approvals and other customary closing conditions. The agreement concludes the strategic review of the China business that began in July 2025.
The total transaction value, including estimated future royalty payments, is expected to exceed USD 500 million. The company also plans to repatriate approximately USD 80 million in cash held in China and prioritise share repurchases using the after-tax proceeds and repatriated funds. The divestment is intended to reduce exposure to the Chinese market and increase the company's focus on North America, water treatment, water management and its business in India. Excluding China, A. O. Smith reported 2025 revenue of approximately USD 3.2 billion, revenue growth of 3% and an EBIT margin of 21%, compared with total revenue of USD 3.8 billion and an EBIT margin of 19% including China.
Source: A. O. Smith Newsroom
