A. O. Smith to Sell 81% of China Business to CPE, Valuing Unit Near $400 Million

A. O. Smith will sell an 81% interest in its China business to CPE, valuing the unit at approximately $400 million, while retaining a 19% stake and receiving long-term brand royalties. TradingView reported the transaction, which the company said is expected to close in the first half of 2027 subject to approvals.

A. O. Smith's 81% China Sale to CPE

A. O. Smith is a 150-year-old global water technology manufacturer that designs and sells residential and commercial water heaters, boilers, and water treatment and purification systems in over 60 countries. CPE is a Beijing-based alternative asset manager.

The company said the total value of the transaction, including the net present value of royalties, is expected to exceed $500 million. A. O. Smith also plans to repatriate approximately $80 million in cash from China and intends to prioritize share buybacks with the proceeds.

The sale follows CPE's agreement in July 2026 to acquire Swiss outdoor outfitter Mammut Sports Group AG from Jacobs Capital, a deal FashionUnited reported would keep Mammut headquartered in Seon under existing management led by CEO Heiko Schäfer. Yicaiglobal reported that the Mammut transaction was pending regulatory review and expected to close in the coming months, with the deal amount not disclosed.

A. O. Smith's Recent Deal Record

According to akta.pro company records, A. O. Smith completed the acquisition of Leonard Valve Company (LVC Holdco LLC) in January 2026 for $470 million in cash, or about $412 million net of tax benefits. The same records show the company acquired the Pureit water purification business from Hindustan Unilever Limited in November 2025 for approximately $120 million.

The records list full-year 2025 net sales of $3.83 billion, a nominal 0.3% increase year-over-year, and full-year 2026 consolidated sales guidance of $3.9-4.02 billion. Record diluted EPS for fiscal year 2025 was $3.85 per share, 6% growth year-over-year.

China Review and Margin Pressure

In August 2026, Simply Wall St reported that A. O. Smith had announced a strategic review of its China business alongside a CFO transition, citing margin pressure, softer demand in China, a lowered residential outlook and tariff headwinds.

In October 2026, Insider Trading & Hedge Fund Data reported that A. O. Smith was restructuring its water-treatment business, booking a $22.6 million charge with $6-8 million in annual savings. The same report said North American margins fell to 24.4% from 25.4% and China sales dropped 28% in the second quarter.

First-Half 2027 Closing

The transaction is expected to close in the first half of 2027, subject to approvals.