Kobelco’s three objectives after buying 70% of CNH’s construction machinery arm

CNH announced today (9 November) that it would set up a joint venture with Kobelco called CE JV to operate the CNH construction equipment business. It will receive a $700 million cash consideration from Kobelco as part of the deal.

CE JV (which is a temporary name for the company until a final name is chosen at a later date), 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.

The CE JV will manufacture machines under the Case Construction, Eurocomach, and New Holland Construction brands.

But when it comes to distribution, CNH will continue to distribute New Holland Construction, while CE JV will distribute Case Construction and New Holland Construction machines.

Neither company has indicated what if there will eventually be changes to the brands as a result of the deal.

Kobelco’s three objectives

Kobelco said that its three aims were: strengthening the global business foundation for growth; combining complementary product portfolios and technologies; and expanding the aftermarket.

The Japanese manufacturer said CNH CE’s presence in North America and Latin America would help it to reach more customers, as well as allow it to draw on regional sales and services networks that would make Kobelco Construction Machinery a “more geographically balanced business”.

When it comes to product portfolios, Kobelco that combining its hydraulic excavators with CNH CE’s products would allow it to offer a wider array of equipment suited to different applications.

Speaking during an investor call after CNH Industrial’s Q3 2026 results, CEO Gerrit Marx added that the deal would make the new CJ JV a “very strong full-line construction player” that combines the compact machines where CNH has traditionally been strong with heavier machines from Kobelco. CNH’s agriculture dealers are expected to be able to offer Kobelco machines to farming customers who need them for tasks including irrigation, roadbuilding, and landscaping.

Kobelco also plans to combine CNH’s global navigation satellite system (GNSS) technologies and other capabilities with its own digital solutions for construction, including its K-Dive remote operation system.

And Kobelco said the larger and broader sales and service networks would allow it to enhance its parts offerings and aftermarket services.

CNH likely to sell remaining stake eventually

The news comes as CNH gave a positive outlook for the construction segment in its Q3 2026 results, which were published on 9 November.

It forecast an increase in construction segment net sales of between 8% and 10% in 2026 year on year. It also revised its forecast for construction segment adjusted EBIT margin upwards to between 2% and 2.3% (from 1.8% and 2.3% previously).

CNH Industrial’s construction sales increased 5% in Q3 2025 to $777 million but were still significantly lower than agriculture, where CNH has decided to focus its efforts. Q3 2026 net sales in that division were $2.9 billion.

CNH will retain its 30% holding in the new CE JV for a three-year “lockup” period after the deal closes. After that, CNH is likely to sell the rest of its stake to Kobelco gradually, according to comments Marx made during the investor call.

Case's European dealer convention in 2026 (Image: Case Construction Equipment)

CNH and Kobelco’s shared history

CNH Industrial and Kobelco already have a history together: CNH at one point manufactured Kobelco-branded excavators for Europe and North America under a 10-year joint venture agreement, although that was terminated in 2012. In 2014, CNH Industrial secured the rights to manufacture of Sumitomo crawler excavators for sale outside North America in the 13-35-tonne range.

Following the end of that agreement, CNH secured the rights in 2014 to manufacture crawler excavators under the name of Kobelco’s Japan-based rival Sumitomo Heavy Industries. Its latest deal with Kobelco could spell the end of that arragement. 

The deal to create the new CE JV is expected to close in 2027 subject to regulatory approvals and other customary closing conditions.

CNH said it would discuss all products and services that it will offer with dealers next month (December), had of the CNH construction equipment being carved out into the JV in 2028.