A. O. Smith has agreed to sell an 81% equity interest in its China business to CPE, an alternative asset manager, in a transaction that values the business at about US$400m on a cash-free, debt-free basis, the company said on 27 October 2026.
Why CPE is buying A. O. Smith (China) Investment Co., Ltd. (81%)
A. O. Smith said the deal positions the China business for growth under experienced local ownership, while its retained 19% stake and a long-term licence for the A. O. Smith brand in China let it share in future growth.
“We are confident CPE is the right partner to lead the business going forward.”
Deal terms and financing
The US$400m valuation excludes the brand licensing royalty stream; including the net present value of licence payments over several decades, A. O. Smith expects total transaction value to exceed US$500m. The structure allows it to repatriate about US$80m of cash held in China, and after-tax proceeds and repatriated cash will be prioritised for share repurchases.
Regulatory approvals and timing
The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the first half of 2027.
Market context
The sale follows a strategic review of the China business. Bloomberg reported in April 2026 that CPE, PAG and Hisense were among parties interested in a majority stake.
