CNH to Sell 70% Stake in Construction Equipment Business to Kobelco for $700 Million
CNH Industrial has reached a definitive agreement with Kobelco Construction Machinery to establish a joint venture for its Construction Equipment (CE) business. Under the agreement, Kobelco will acquire a 70% interest and become the majority owner.
The transaction values CNH’s Construction Equipment business at an enterprise value of $1 billion. CNH expects to receive $700 million in cash, subject to customary adjustments. It will retain a 30% equity stake in the joint venture.
The agreement supports CNH’s strategy to focus on agricultural equipment, technology and services. The company plans to use the proceeds to reduce debt and strengthen its balance sheet.
“This transaction significantly advances CNH’s portfolio simplification and sharpens our focus on agriculture in line with our Path to 2030,” said Suzanne Heywood, Chair of the CNH Board of Directors.
CNH to Strengthen Its Focus on Agriculture
CNH CEO Gerrit Marx said the transaction will strengthen the company’s ability to invest in agricultural products and technologies. It will also create a stronger construction equipment business through the combination of both companies’ capabilities.
Following the transaction, CNH will continue offering agricultural equipment through its Case IH, New Holland and STEYR brands. Its Raven precision technology platform will also remain part of the business. CNH Capital will continue operating within CNH.
CNH agricultural dealers will retain access to construction equipment supplied by the joint venture. The transaction is also expected to improve CNH’s margins.
The agreement follows CNH’s acquisition of Raven Industries in 2021 and the separation of its on-highway commercial vehicles business through the Iveco Group spin-off in 2022.
Joint Venture to Combine Global Reach and Technology
The joint venture will combine CNH’s established construction equipment brands, product portfolio and global dealer network with Kobelco’s expertise in hydraulic excavators, cranes and digital construction solutions.
Kobelco will contribute technologies such as K-DIVE®, its remote operation system. The companies also expect their complementary geographic presence to create a stronger platform for global growth.
The joint venture will offer equipment for earthmoving, lifting and compaction applications across heavy and compact segments. Its portfolio will include excavators, loaders, graders, dozers, compact track loaders, skid steer loaders and tractor loader backhoes.
Products will continue to be sold under the CASE Construction, Eurocomach and New Holland Construction brands. Existing global sales, service and support channels will also remain in place.
Humayun Chishti, President of CNH’s Construction segment, is expected to continue leading the business as CEO after the transaction closes.
Financial and Transaction Details
CNH expects to use the net cash proceeds from the sale to reduce debt and strengthen its financial position. Both parties will be subject to a three-year lock-up period.
The joint venture will be established through the creation of two companies that will jointly operate the business. CNH will also remain a strategic partner to support continuity and a smooth transition.
The transaction is expected to close by the end of 2027, subject to regulatory approvals and other customary closing conditions.
BofA Securities and Goldman Sachs & Co. LLC are acting as financial advisors to CNH. Pillsbury Winthrop Shaw Pittman LLP is its legal advisor.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. is advising Kobelco Construction Machinery on the transaction, with White & Case LLP serving as its legal advisor.
