CNH has agreed to sell a 70% interest in its construction equipment business to Japanese manufacturer Kobelco Construction Machinery, creating a joint venture that values the business at $1bn and leaves CNH with a 30% stake.
The deal marks the latest step in CNH’s multi-year strategy to simplify its portfolio and focus entirely on agriculture, following its acquisition of Raven Industries in 2021 and the spin-off of Iveco Group in 2022.
Under the agreement, CNH will receive approximately $700m in cash, which it plans to use to reduce debt and strengthen its balance sheet. The company said the transaction will position it as the world’s largest pure-play agricultural machinery OEM, with greater capacity to invest in equipment, precision technology and dealer support.
“CNH’s agreement with Kobelco follows a deliberate process to strengthen our construction business and sharpen our focus on our agriculture business,” said CEO Gerrit Marx. “The transaction positions CNH as the largest pure-play agriculture machinery OEM, with the ability to invest organically and inorganically as the agriculture industry moves toward recovery.”
Recovery signals emerging in agricultural machinery markets
The announcement came alongside CNH’s third-quarter 2026 results, which showed the company outperforming earnings expectations despite continued weakness in several agricultural equipment markets.
Consolidated revenues were broadly flat year-on-year at $4.35bn, while adjusted net income nearly doubled to $205m from $109m in the same period last year.
Adjusted diluted earnings per share reached $0.16, while operating cash generation remained robust, with net cash provided by operating activities of $686m.
Reported net income fell to $35m from $67m a year earlier, largely because of a $156m non-cash valuation allowance charge related to deferred tax assets in Brazil.
The quarter also benefited from $109m in tariff refunds recognised during the period.
Precision technology remains central to growth plans
The company said the Kobelco transaction will allow it to concentrate resources on its agriculture portfolio, including the Raven precision agriculture platform, product development and dealer network investments.
The move reflects management’s view that the agricultural cycle is beginning to improve after an extended downturn driven by lower farm incomes, elevated machinery inventories and weaker farmer spending.
Marx highlighted “improving cycle indicators in North America” while acknowledging that conditions remain volatile in Europe, the Middle East, Africa and Brazil.
“We continue our rigorous execution, prudent production planning, and building a stronger, more competitive CNH for the cycle dynamics ahead,” he said.
Construction business gains new owner
While CNH is reducing its direct exposure to construction equipment, the company is not exiting the segment completely.
The new joint venture will combine CNH’s CASE Construction, New Holland Construction and Eurocomach businesses with Kobelco’s expertise in excavators, cranes and digital construction technologies, including its K-DIVE remote operation platform.
CNH agriculture dealers will continue to have access to construction equipment supplied by the joint venture, while CNH Capital will continue providing financing services.
The transaction is expected to close by the end of 2027, subject to regulatory approvals.
