CNH Industrial to spin off CE business to focus on agricultural machines

CNH Industrial has announced that it will sell a 70% share of its business to Kobelco Construction Machinery, a subsidiary of Kobe Steel, to form Kobelco.

The new company will become the majority owner of the construction equipment joint venture.

The report noted that this ‘continues CNH’s transformation into a leading, pure-play agriculture equipment, technology and services company’.

Value of the transaction is said to be around $1 billion, with CNH to receive $700 million in cash for 70% of the business, while retaining a 30% stake in the joint venture. Each party will be subject to a three-year lock-up period.

“This transaction significantly advances CNH’s portfolio simplification and sharpens our focus on agriculture in line with our Path to 2030,” said Suzanne Heywood, chair of the CNH Board of Directors.

“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.”

As part of this, CNH will continue to provide full-line agricultural applications through the Case IH, New Holland, Steyr and CNH Tech brands, together with products from the Raven precision technology platform, purchased in 2021.

The transaction will combine the brands, product portfolio and global support network of CNH’s Construction Equipment business with Kobelco’s tech capabilities, which extend from hydraulic excavators and cranes through to related digital solutions.

The CE JV will offers a range of earthmoving, lifting and compaction hardware across compact and heavy segments, currently marketed under the Case Construction, Eurocomach and New Holland Construction brands.

The outlined transaction is expected to be finalised by the end of 2027.