CNH to sell 70% of construction equipment business to Kobelco in $1 billion joint venture

CNH agreed on Nov. 9, 2026, to sell a 70% stake in its construction equipment business to Japan's Kobelco Construction Machinery Co., a wholly owned subsidiary of Kobe Steel, in a joint venture deal that values the unit at $1 billion and leaves CNH focused almost entirely on farm machinery. The company, which issued the announcement from Basildon, U.K., alongside its third-quarter results, expects about $700 million in cash for the stake and plans to keep the remaining 30%.

Deal background

The transaction reunites two companies with a long shared history in excavators. Kobe Steel, Kobelco Construction Machinery and CNH Global formed a global construction equipment alliance that took effect in January 2002 under a 10-year initial term. According to a Kobe Steel release from December 2012, the partners chose not to renew it. Kobelco then began selling and servicing its own excavators in North America, Europe, South America, the Middle East, Africa and the CIS countries, while Kobe Steel bought back CNH's 20% stake in Kobelco Construction Machinery. CNH kept the right to build and sell licensed Kobelco excavator designs and to buy machines from Kobelco on an original equipment basis through December 2017.

More than a decade later, the relationship flips. Kobelco, whose strengths lie in hydraulic excavators and cranes, will now control a business built around CASE wheel loaders, backhoes and compact equipment, product lines where it has a smaller presence. Kobelco also brings its K-DIVE remote operation platform, which CNH cited as part of the construction technology the joint venture can draw on.

For CNH, construction has been the smaller of its two equipment segments and has struggled on profitability this year. In its second-quarter filing with the U.S. Securities and Exchange Commission, CNH reported construction net sales of $1.44 billion for the first half of 2026, up from $1.36 billion a year earlier, while segment adjusted EBIT swung to a $13 million loss from a $49 million profit. CNH reported total 2025 revenue of $18.1 billion across its brands.

Industry implications

CNH chair Suzanne Heywood said the transaction significantly advances the company's portfolio simplification and sharpens its focus on agriculture. Once the deal closes, CNH's retained brands will be Case IH, New Holland, STEYR, the CNH Tech precision technology platform, which includes Raven, and the CNH Capital finance arm. The company said it expects the transaction to be accretive to its margins.

The move reflects a broader pattern in heavy equipment, where diversified groups have narrowed their portfolios to concentrate engineering budgets on the segments where they hold the strongest positions. Farm machinery and construction equipment each demand heavy, distinct spending on automation, emissions compliance and electrification. Splitting the two lets each owner direct capital to a single customer base.

For contractors and rental fleets, the immediate effect should be limited. CNH said CE JV products will continue to be supported through existing service channels, and CNH Capital will keep offering retail financing, leases, rental programs and insurance to CE JV customers and dealers.

Competitive and supply chain implications

Kobelco gains a broader product line and an established dealer footprint in North America and Europe, two regions where it had to build its own network after the 2012 split. Combining Kobelco excavators with CASE loaders and compact machines gives the joint venture a fuller lineup to put against larger full-line rivals, which typically sell excavators, loaders and compact equipment through a single dealer network.

The dealer channel is a central question. CNH said its agriculture dealers will continue to have access to construction machines supplied by CE JV, which preserves a route to rural and mixed-use customers who buy both tractors and loaders. How CE JV aligns Kobelco's independent dealers with CASE and New Holland Construction outlets will shape overlap and territory decisions during the integration period.

On the supply side, the release did not name the plants, employees or component contracts that will move into the joint venture. Shared purchasing for engines, hydraulics and electronics between CNH's agriculture business and the construction unit is likely to need transition arrangements, and suppliers to both businesses will be watching how those agreements are written.

Regional implications

In North America, the CASE Construction brand has a long-established base of dealers and rental customers, and Kobelco gains scale in a region where it has spent more than a decade building its own network. In Europe, the joint venture brings together New Holland Construction, the Italian compact equipment brand Eurocomach and Kobelco's existing European operations.

In Japan, the deal extends Kobe Steel's overseas machinery business as Japanese industrial groups look abroad for growth. For the United States and Italy, where CNH has deep manufacturing roots, the main open question is how manufacturing and engineering roles will be divided between CNH and CE JV. CNH has not yet disclosed that detail.

What comes next

• Regulatory filings and approvals in the jurisdictions where CNH's construction business and Kobelco operate.
• Disclosure of which plants, employees and contracts transfer into CE JV and how the two operating companies are structured.
• Dealer network decisions covering overlap between Kobelco, CASE Construction and New Holland Construction outlets.
• Transition agreements on parts supply, financing through CNH Capital and service support.
• Targeted closing by the end of 2027, followed by a three-year lock-up for both shareholders.

Sources

• CNH: Agreement to form a joint venture by selling a 70% interest in its construction equipment business to Kobelco Construction Machinery
• Kobe Steel: Kobe Steel, Kobelco Construction Machinery and CNH Global not to renew alliance (December 2012)
• CNH Industrial N.V. Form 10-Q for the quarter ended June 30, 2026

Image: CASE CX750D crawler excavator, by Case Construction Equipment via Wikimedia Commons, CC BY-SA 4.0. Cropped and edited by Credence Research.