Cnh sells 70% of its construction machinery to Japanese Kobelco

CNH Industrial and Japanese Kobelco Construction Machinery have closed an agreement for the sale of 70% of CNH's Construction Equipment division. The agreement will create a joint venture controlled by the Japanese group. In the operation, CNH's earthmoving machinery sector was valued at 1 billion dollars, which will result in proceeds of 700 million for the sale of the 70% stake with the remaining 30% of the new company remaining with CNH. Closing is expected by the end of 2027, subject to regulatory approvals and customary conditions. The role of CEO of the joint venture should be assumed by Humayun Chishti, current president of CNH's Construction division.

The agreement also provides for a lock-up period which will prohibit both parties from selling their respective shareholdings for three years. CNH will in fact maintain a role as strategic partner of the new company, retaining 30% of the capital. The new reality will be able to count on an offer that ranges from compact to heavy machines, with applications in the earthmoving, lifting and compaction sectors. The support of CNH Capital also remains confirmed, which will continue to make retail financing, leasing, rental programs and insurance products available to dealers and customers.

For CNH this is an important step within a strategy that aims to concentrate its resources on the agricultural sector, strengthening investments in machinery, precision technologies and services for farmers. The proceeds of the sale will be used to reduce the debt and strengthen the financial structure. “This transaction significantly advances the simplification of our portfolio and strengthens our focus on agriculture,” said Suzanne Heywood, chair of the CNH Board of Directors. “This transaction strengthens CNH's ability to invest in the products and technologies that are most important to farmers,” added Gerrit Marx, CEO of CNH. "At the same time, the creation of a stronger player in the construction machinery sector will bring benefits to dealers and customers, thanks to a range of competitive, high-quality machines equipped with advanced technologies." According to what Marx explained, the decision came at the end of an in-depth evaluation of the possible options for the future of the Construction Equipment division. "It has become clear - said Marx - that Kobelco represents the right partner in the long term and that the joint venture model will guarantee a smooth transition for the business and the people who work there".