After Iveco, another piece of the former FIAT galaxy leaves. CNH’s construction branch goes to Kobelco

We brought you live coverage of the press conference that sealed the sale of Iveco Group’s assets to Tata. The road division of what was once FIAT has therefore merged into Stellantis and Tata Motors. The spin-off announced during the Capital Markets Days on Wall Street revealed the divergence between automotive and off-highway activities. Exor is divesting from “capital intensive” companies, and CNH Industrial Group was the next in line.

Kobelco takes control of 70% of CNH CE

There is therefore an industrial project behind the move by the Japanese group, which specializes in excavators, demolition machinery, forestry equipment, and cranes. Further developments are awaited—without haste, however, since the closing is expected by the end of 2027.

Below is an extensive excerpt from the press release. “With roots dating back over 180 years, CNH has established itself as a global manufacturer of agricultural and construction equipment through the combination of several long-standing companies. The CNH CE division manages the global brands Case Construction Equipment and New Holland Construction, as well as Eurocomach, which offers compact construction equipment in Europe. It boasts an extensive sales and service network in North America, Europe, Latin America, and other regions worldwide. Its broad product portfolio ranges from small and medium-sized construction machinery to large equipment for infrastructure projects and public works.

Kobelco Construction Machinery has consolidated its global commercial presence, developed competitive hydraulic excavators and cranes through its technological know-how, and introduced advanced digital transformation (DX) solutions for the construction sector, including K-DIVE. The broad product portfolio and the sales and service network of the CNH CE division are highly complementary to the products, technologies, and jobsite expertise of Kobelco Construction Machinery.

Transaction Objectives

Building on these complementary strengths, Kobelco Construction Machinery aims to provide added value to customers and achieve sustainable business growth. Specifically, it will strive to offer customers a wider range of products tailored to their applications, strengthen after-sales support, and expand its range of solutions for jobsite challenges. To achieve these goals, Kobelco Construction Machinery will focus on the following three areas.

• Strengthening the Company’s Global Foundations for Growth
  The well-established presence of the CNH CE Business in North America and Latin America will help Kobelco Construction Machinery reach a larger number of customers and expand sales opportunities in key markets and those with growth potential. By drawing on regional operations and the parties’ sales and service networks, Kobelco Construction Machinery aims to build a more geographically balanced business and enhance its capacity to serve customers worldwide.

• Combining Complementary Product Portfolios and Technologies
  By combining its hydraulic excavators with the complementary product portfolio of the CNH CE Business, Kobelco Construction Machinery aims to offer customers a wider range of equipment suited for different applications. It also intends to strengthen product competitiveness by leveraging the technologies and expertise of both Parties. Through the partnership with CNH, Kobelco Construction Machinery intends to combine CNH’s Global Navigation Satellite System (GNSS) technologies and other expertise with its own digital construction solutions, including K-DIVE, to expand its range of solutions for jobsite challenges.

• Expanding the After-Sales Sector
  By leveraging a larger installed base and more extensive sales and service networks, Kobelco Construction Machinery aims to enhance its parts offering and after-sales services for a greater number of customers. By maintaining and deepening customer relationships post-sale, it aims to provide ongoing value to customers while strengthening its own revenue base.

Insights from the CNH CE side

“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, Chief Executive Officer 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.”

Marx continued, “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.”

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.” 

What engines does Kobelco use?

Kobelco relies on a generous portfolio of engine manufacturers, with a predominance of Japanese brands like Hino, Isuzu, Mitsubishi, and Yanmar. Nevertheless, there is also room for mtu (now under Deutz, another key player), Cummins, and Scania. One of the crucial steps of the industrial plan will involve the harmonization of suppliers—including FPT—and the vision for electrification.

What are the financial and corporate details of the agreement between Kobelco and CNH?

Kobelco will acquire a 70% stake in the new company (“NewCo”) into which CNH’s earthmoving sector will merge, while CNH will retain a minority stake.

What macroeconomic and market factors justify Kobelco’s investment in this transaction?

The operation aims to capture medium-to-long-term growth in global demand and enable Kobelco to reach more customers by leveraging the product portfolios and sales networks of both parties.