A.O. Smith to Sell 81% China Stake to CPE for $400 Million, Retain 19% and Licensing Royalties

A.O. Smith Corp. (AOS) agreed to sell an 81% stake in its China business to alternative asset manager CPE, valuing the unit at about $400 million on a cash-free, debt-free basis. Including the net present value of licensing royalties, total value is expected to exceed $500 million. The water technology company will retain a 19% interest and long-term brand licensing royalties, and expects to repatriate roughly $80 million in cash held in China. Proceeds and repatriated cash will fund share repurchases. The deal is expected to close in the first half of 2027, subject to customary conditions. A.O. Smith said the transaction sharpens its portfolio focus while preserving exposure to the unit's future growth, and it will continue working with CPE on branding, product innovation and service quality. The company reports third-quarter results on October 29. Shares rose 0.24% on the NYSE on Tuesday, closing at $62.06.