CNH to sell 70% stake in construction equipment business to Kobelco

CNH and Kobelco Construction Machinery Co will establish a joint venture that will operated CNH’s construction equipment business called CE JV.

Kobelco will be the majority owner of the CE JV and CNH expects to receive a $700 million cash consideration, while retaining a 30% stake in the joint venture.

Once the deal has closed, CNH will continue to provide full-line agriculture applications through the Case IH, New Holland, Steyr, and CNH Tech brands. CNH agriculture dealers will also have continued access to construction equipment supplied by the CE JV. CNH Capital will remain part of CNH.

CNH said the latest deal was the next step in its “multi-year strategic transformation journey” to sharpen its focus on agriculture. That started with the acquisition of Raven Industries in 2021 and the separation of the on-highway commercial vehicles business through the spin-off of Iveco Group in 2022.

Humayun Chishti, president of CNH’s construction segment, is expected to continue leading the business as CEO after the deal has closed.

CE JV will continue offering a broad range of earthmoving, lifting, and compaction machines, including excavators, loaders, graders, dozers, compact track loaders, skid steer loaders, and backhoe loaders. Currently, those machines are sold under the Case Construction, Eurocomach, and New Holland Construction brands. They will continue to be sold under the same channels and CNH Capital will continue to offer its services to CE JV customers.

Meanwhile, CNH will use the $700 million it gains from the disposal to pay down 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. “As the largest pure-play agriculture machinery OEM, CNH will be better positioned than ever to invest with conviction and create value for farmers, dealers, and shareholders at every point in the cycle.”

Gerrit Marx, chief executive officer of CNH, added, “We are confident that this is the right next step for CNH, our dealers, customers, and colleagues. As the agriculture industry moves toward recovery, this transaction strengthens CNH’s ability to invest in the products and technologies that matter most to farmers. At the same time, by creating a stronger construction equipment player, both CNH and CE JV dealers, along with their customers, will benefit from a suite of high-quality, cost-competitive construction machines that incorporate leading technology.

“We undertook a comprehensive process to evaluate how best to position our Construction Equipment business, and it was clear that Kobelco is the right long-term steward, and that our joint venture approach will ensure a smooth transition for the business and our team members who support it. The CE JV will be a leader with the scale, focus, and agility to invest, accelerate innovation, and better serve global construction customers.”

The transaction is set to close in 2027.