CNH Sells 70% of Construction Business to Kobelco for $700 Million

CNH announced on Monday that it has agreed to sell a 70% stake in its construction equipment business to Japan's Kobelco Construction Machinery for $700 million in cash. The transaction values the entire construction division at an enterprise value of $1 billion, with CNH retaining a 30% ownership share in the newly formed joint venture.

The deal is part of CNH's broader corporate transformation strategy, designated as its "Path to 2030," which aims to position the company as a pure-play manufacturer dedicated solely to agricultural machinery, technology, and services. Chair Suzanne Heywood noted that the milestone significantly simplifies the company's portfolio and strengthens its focus on agriculture.

Chief Executive Officer Gerrit Marx stated that Kobelco is the appropriate long-term partner as the agricultural sector moves toward a recovery. The joint venture will combine CNH's construction operations—including the CASE Construction, Eurocomach, and New Holland Construction brands—with Kobelco's expertise in hydraulic excavators, cranes, and digital construction site solutions such as the K-DIVE remote control technology.

Humayun Chishti, currently the president of CNH's construction segment, is expected to lead the new joint venture as its chief executive officer upon the transaction's closing. Meanwhile, CNH's agricultural dealers will maintain access to construction machinery supplied by the partnership, and CNH Capital will continue providing financial, leasing, and insurance services to customers and distributors.

The transaction requires regulatory approvals and customary closing conditions, with finalization expected by the end of 2027. Both parties will be subject to a three-year lock-up period restricting the sale of their respective shares. CNH intends to use the net proceeds from the sale to pay down debt and strengthen its corporate balance sheet.

The announcement coincided with CNH's financial reporting for the third quarter of 2026. The company posted a net income of $35 million, down 48% compared to the same period in 2025, largely impacted by a non-monetary extraordinary charge related to financial operations in Brazil. However, adjusted net income nearly doubled to $205 million, and industrial adjusted EBIT rose by 94% to $202 million.

Despite softer demand in agricultural machinery, CNH upgraded its financial guidance for the full year 2026, raising its adjusted diluted earnings per share forecast and increasing its anticipated industrial free cash flow. The company expects the construction division's revenue growth to range between 8% and 10% for the year.