CNH sells 70% of construction equipment business to Kobelco

Overview

Updated Yesterday

CNH Industrial is selling 70% of its construction equipment business to Kobelco Construction Machinery, a unit of Japan's Kobe Steel, for $700 million in cash. The price values the whole business at $1 billion and leaves CNH with a 30% stake it cannot sell for three years.

The sale finishes a five-year retreat. CNH now makes only farm machinery, sold under Case IH, New Holland and STEYR, plus the Raven precision technology it bought in 2021. Construction was about a quarter the size of agriculture in the third quarter of 2026.

Why it matters

Farm equipment is now CNH's entire business. The sale cuts debt and hands its construction lineup to a Japanese rival.

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Key Indicators

$1B

Enterprise value of CNH's construction business

The total valuation placed on the unit being sold.

$700M

Cash CNH receives for 70%

Subject to adjustments for net debt and working capital.

70%

Stake sold to Kobelco

Kobelco becomes majority owner and operating manager.

30%

Stake CNH retains

Locked up for three years, then subject to a put-and-call arrangement.

$5.5B

Estimated combined revenue of the joint venture

Off-Highway Research's estimate, which would rank it around 15th among global equipment makers.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Gerrit Marx

Chief Executive Officer, CNH Industrial

Leading the sale and the company's shift to agriculture

Suzanne Heywood

Chair of the Board, CNH Industrial

Framed the sale as the next step in CNH's strategy

Chris Sleight

Managing Director, Off-Highway Research

Analyst tracking the deal's industrial logic

Organizations Involved

CNH Industrial N.V.

Agricultural and construction equipment manufacturer

Seller of 70% of its construction business

CNH Industrial makes farm machinery under Case IH, New Holland and STEYR, and is selling most of its construction equipment business.

Kobelco Construction Machinery Co., Ltd.

Construction equipment manufacturer

Buyer of 70% and future operating manager of the joint venture

Kobelco Construction Machinery is a Japanese maker of hydraulic excavators and cranes, wholly owned by Kobe Steel.

Kobe Steel, Ltd.

Steel and machinery conglomerate

Parent company funding the acquisition

Kobe Steel is a Japanese steel and machinery conglomerate that owns Kobelco Construction Machinery.

Sumitomo Heavy Industries

Industrial machinery manufacturer

Existing CNH excavator supplier whose alliance may end

Sumitomo Heavy Industries is a Japanese machinery maker that has supplied CNH with crawler excavators since 2014.

Timeline

2021 November 2026

4 events Latest: Yesterday

Tap a bar to jump to that date

November 2026
CNH agrees to sell 70% of construction unit to Kobelco
Latest Deal

CNH will receive $700 million for 70% of the business, valuing it at $1 billion; closing is expected by the end of 2027.
Yesterday
CNH reports third-quarter results
Earnings

CNH raises its construction segment margin forecast and reports $2.9 billion in agriculture sales.
2 days ago
2022
CNH spins off Iveco Group
Divestiture

CNH separates its on-highway commercial vehicle business into an independent company.
2022
2021
CNH buys Raven Industries
Acquisition

CNH acquires the precision agriculture technology company, starting its push toward farm technology.
2021

Scenarios

Deal closes by end of 2027, creating a $5.5 billion construction joint venture

Likely Resolves by End of 2027

Discussed by: CNH and Kobe Steel statements; Off-Highway Research's Chris Sleight

Both companies say closing is expected by the end of 2027, subject to regulatory approvals. Kobelco would run the business, CNH would keep 30%, and CNH's agriculture dealers would keep selling the machines.

Regulators block or delay the sale

Unlikely Resolves by End of 2027

Discussed by: No regulator has signaled opposition; the scenario rests on the approvals the deal requires

The transaction needs competition and investment clearances in multiple countries. A formal objection or a prolonged review would push closing past the companies' target.

CNH sells its remaining 30% stake to Kobelco after the lock-up

Possible Resolves by End of 2031

Discussed by: CEO Gerrit Marx on the post-deal analyst call, as reported by Transport Topics and Construction Briefing

After three years, a put-and-call arrangement lets CNH transfer full ownership to Kobelco. Marx said CNH is likely to sell the rest of its stake gradually.

Sumitomo excavator alliance ends before the deal closes

Likely Resolves by End of 2027

Discussed by: Chris Sleight of Off-Highway Research

CNH has built Sumitomo crawler excavators since 2014 under an alliance dating to 1992. Sleight said the arrangement cannot continue once Kobelco, a direct Sumitomo competitor, controls the business.