Kobelco Construction Machinery has acquired the construction equipment business of CNH Industrial and its affiliates both companies announced this week. Kobelco and CNH Industrial have entered into a share purchase agreement for Kobelco to acquire 70 percent of the shares. CNH will transfer the CNH CE business to a company it has established called NewCo to facilitate the transaction. Kobelco will then acquire 70 percent of the shares of NewCo. Completion of the transaction is subject to necessary regulatory clearances and other customary conditions.

The transaction continues CNH's transformation into a leading, pure-play agriculture equipment, technology, and services company with a strengthened financial profile and gives it enhanced capacity to invest in products, precision technology, and its global dealer network.

“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.”

“We are confident that this is the right next step for CNH, our dealers, customers, and colleagues,” said Gerrit Marx, CEO of CNH. “As the agriculture industry moves toward recovery, this transaction strengthens CNH’s ability to invest in the products and technologies that matter most to farmers. At the same time, by creating a stronger construction equipment player, both CNH and CE JV dealers, along with their customers, will benefit from a suite of high-quality, cost-competitive construction machines that incorporate leading technology.

“We undertook a comprehensive process to evaluate how best to position our Construction Equipment business, and it was clear that Kobelco is the right long-term steward, and that our joint venture approach will ensure a smooth transition for the business and our team members who support it. The CE JV will be a leader with the scale, focus, and agility to invest, accelerate innovation, and better serve global construction customers.”

Why Kobelco Benefits

Global demand for construction equipment is expected to grow over the medium to long term, driven by the renewal of aging infrastructure, continued urbanization, and growing investment in energy-related projects. At the same time, the construction industry faces a growing need to address labor shortages, improve safety and productivity, and reduce the environmental impact of its operations. As a result, customers now expect more than product performance and quality alone. They also seek aftermarket services that keep equipment running reliably and digital solutions that address jobsite chall`enges. Guided by its commitment to addressing customer needs at the jobsite, Kobelco Construction Machinery has listened closely to customers and worked to resolve the challenges they face.

Kobelco aims to strengthen the competitiveness of its products and its ability to supply equipment. It also aims to maintain close customer relationships after the sale, helping customers keep equipment operating reliably and address jobsite challenges. The transaction will enable Kobelco Construction Machinery to reach more customers worldwide by drawing on the parties' product portfolios and sales and service networks. Insights gained from serving this broader customer base will help Kobelco Construction Machinery enhance its parts offerings, aftermarket services, and solutions. These improvements will deliver greater value to customers and support sustainable business growth.

Kobelco Construction Machinery will focus on the following three areas.

· Strengthening the Global Business Foundation for Growth

The CNH CE Business's established presence in North America and Latin America will help Kobelco Construction Machinery reach more customers and expand sales opportunities in key markets and those with growth potential. Drawing on the two companies’ regional operations and sales and service networks, Kobelco Construction Machinery aims to build a more geographically balanced business and enhance its ability to serve customers worldwide.

· Combining Complementary Product Portfolios and Technologies

By combining its hydraulic excavators with the CNH CE businessʼ complementary product portfolio, Kobelco expects to offer customers a wider range of equipment suited to different applications. It also intends to strengthen the competitiveness of its products by building on the companies’ technologies and expertise. Through its partnership with CNH, Kobelco Construction Machinery intends to combine CNHʼs global navigation satellite system (GNSS) technologies and other capabilities with its own digital solutions for construction, including K-DIVE, to broaden its range of solutions for jobsite challenges.

· Expanding the Aftermarket Business

Drawing on a larger installed base and broader sales and service networks, Kobelco Construction Machinery aims to enhance its parts offerings and aftermarket services for more customers. By maintaining and deepening customer relationships after the sale, it aims to deliver ongoing value to customers while strengthening its earnings base.

The transaction does not currently change Kobelco Construction Machineryʼs aftermarket services, the supply of replacement parts, warranties, or points of contact for product inquiries. Its current procurement policies, terms of business, and business processes are also unchanged. If any changes occur as the transaction progresses, Kobelco Construction Machinery will notify affected customers and business partners.

Humayun Chishti, president of CNH's Construction segment, said, “This is a tremendous opportunity for our team, our dealers, and our customers. We are adapting to changing dynamics in the construction sector and a greater pace of innovation. Kobelco is the ideal partner — a global excavator and crane specialist with leading technology, including K-DIVE remote operation technology. Together as the CE JV, we will deliver a complementary portfolio built for long-term growth, and benefit from a stronger platform to do what we do best — build exceptional machines and deliver outstanding support to the people who rely on them every day.”

Chishti is expected to continue leading the business as CEO following closing.

The CE JV will offer a comprehensive portfolio spanning a broad range of earthmoving, lifting, and compaction applications across the heavy and compact segments — including excavators, loaders, graders and dozers, compact track loaders, skid steer loaders, and tractor loader backhoes — currently sold under the Case Construction, Eurocomach, and New Holland Construction brands. The CE JV’s products will continue to be supported by the high-quality service and support available worldwide to customers today, through the same channels. CNH Capital will continue to support the CE JV’s customers and dealers with a full range of retail financing, leases, rental programs, and insurance products.

Transaction Details

The transaction values CNH’s Construction Equipment business at an enterprise value of $1 billion. CNH expects to receive $700 million in cash consideration for 70 percent of the business, subject to adjustments for net debt, working capital, and other customary items. CNH expects to use these net cash proceeds to reduce debt and strengthen its balance sheet. CNH will retain a 30-percent equity ownership position in the CE JV. Each party will be subject to a three-year lock-up period. To provide continuity and facilitate a smooth business transition, CNH will continue to remain a strategic partner to the CE JV.

The joint venture will be established through the creation of two companies that will jointly operate as the CE JV.

The transaction is expected to close by the end of 2027