Kobelco Construction Machinery has agreed to acquire a 70% stake in CNH Industrial’s construction equipment business for US$700 million (NZ$1.25 billion).
The transaction values the business at US$1 billion (NZ$1.79b), with CNH retaining a 30% interest in the new joint venture.
Completion is expected by the end of 2027, subject to regulatory approvals and other customary closing conditions.
The agreement will bring Case Construction Equipment, New Holland Construction and European compact equipment brand Eurocomach together with Kobelco’s excavator, crane and construction technology operations.
“This transaction significantly advances CNH’s portfolio simplification and sharpens our focus on agriculture in line with our Path to 2030,” CNH chair Suzanne Heywood says.
“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.”
CNH chief executive Gerrit Marx says Kobelco was selected following a comprehensive review of options for the construction equipment business.
“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,” Marx says.
“The CE JV will be a leader with the scale, focus and agility to invest, accelerate innovation and better serve global construction customers.”
The joint venture’s product range will include excavators, loaders, graders, dozers, compact track loaders, skid-steer loaders and tractor-loader backhoes.
It will combine CNH’s brands, product portfolio and international sales and service network with Kobelco’s expertise in hydraulic excavators, cranes and digital construction technology, including its K-DIVE remote-operation system.
CNH construction segment president Humayun Chishti is expected to continue leading the business as chief executive after the transaction closes.
“This is a tremendous opportunity for our team, our dealers and our customers,” Chishti says.
“Kobelco is the ideal partner — a global excavator and crane specialist with leading technology, including K-DIVE remote operation technology.
“Together as the CE JV, we will deliver a complementary portfolio built for long-term growth, and benefit from a stronger platform to do what we do best — build exceptional machines and deliver outstanding support to the people who rely on them every day.”
Existing sales, servicing, replacement-parts and warranty arrangements remain unchanged. CNH Capital will continue offering finance, leasing, rental programmes and insurance products to the joint venture’s customers and dealers.
CNH agriculture dealers will also retain access to construction machinery supplied by the new business.
The sale is the latest step in CNH’s multi-year move towards becoming a dedicated agricultural equipment, technology and services company.
That transformation included its acquisition of precision-agriculture technology company Raven Industries in 2021 and the 2022 spin-off of its on-highway commercial vehicle operations as the separately listed Iveco Group.
After the Kobelco transaction closes, CNH will retain its Case IH, New Holland, STEYR, CNH Tech and CNH Capital operations, including the Raven precision-technology platform.
CNH plans to use the cash proceeds to reduce debt and strengthen its balance sheet. The company says the transaction is expected to improve its margins and increase its capacity to invest in agricultural products, precision technology and its global dealer network.
Kobelco says combining the businesses will strengthen its position in North and Latin America while providing customers with a broader equipment range and expanded parts and aftermarket support.
Both parties will be subject to a three-year lock-up period covering their interests in the joint venture, while CNH will remain involved as a strategic partner.
Kobelco Construction Machinery is a wholly owned subsidiary of Kobe Steel, which is listed on the Tokyo Stock Exchange. Kobelco Construction Machinery is not separately listed.
CNH Industrial is listed on the New York Stock Exchange under the ticker CNH.
