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A. O. Smith to sell 81% of China business to CPE, keeps 19% stake

A. O. Smith agrees to sell 81% of its China business to CPE for about $400 million, keeping a 19% stake and brand license, per TradingView.

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what happened

Water technology company A. O. Smith, according to TradingView, has signed definitive agreements with CPE, a large alternative asset manager. CPE will take an 81% interest in the company's China business, while A. O. Smith keeps a 19% stake and a long-term brand licensing deal that brings ongoing royalties.

The deal values the China unit at about $400 million on a cash-free, debt-free basis. Including the net present value of future licensing payments, the total value is expected to exceed $500 million. The structure also lets A. O. Smith bring back about $80 million in cash now held in China. The decision follows a strategic review announced in July 2025.

Closing is expected in the first half of 2027, subject to regulatory approvals. Goldman Sachs acted as financial advisor and Latham & Watkins as legal counsel. The company will report third quarter results on October 29, 2026.

why it matters

For investors, the main point is a portfolio shift: the company exits most of its China business but keeps a stake and brand income. It plans to direct after-tax proceeds and repatriated cash toward share buybacks, which could draw attention to the stock. More detail on the outlook for the rest of the year should come with the October 29 earnings call.

market impact

A. O. Smith: sale of 81% of China business and planned buybacks matter for the company's shares

tags

MergerAcquisitionStockUnited States

instruments

A. O. SmithCPEUS water heater stocks

sources

  1. A. O. Smith Announces Majority Interest of China Business Acquired by CPE; A. O. Smith to Retain 19% Stake and Long-Term Brand License — TradingView, 28 October 2026 at 00:55 UTC
  2. A O Smith Announces Majority Interest Of China Business Acquired By CPE — Reuters, 28 October 2026 at 00:57 UTC

prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.

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