CNH Signs Definitive Agreement to Sell 70% of Construction Business to Kobelco at a $1 Billion Valuation

After closing, CNH will sell only agriculture lines. They are Case IH, New Holland, STEYR and CNH Tech, including Raven.

Board chair Suzanne Heywood said the deal "significantly advances CNH's portfolio simplification." It "sharpens our focus on agriculture in line with our Path to 2030."

The move caps a multi-year reshaping at CNH. It bought Raven Industries in 2021 and spun off Iveco Group in 2022.

Reuters called the sale the end of a long-running reshaping. It leaves CNH as a purely agricultural company, Reuters reported.

CNH's brands together generated $18.1 billion in revenue in 2025. The figure is the company's own, from the release's description of CNH.

The business Kobelco is buying

Construction net sales rose 5% to $777 million in the third quarter. CNH reported the figures in a separate release on Monday.

Construction Adjusted EBIT rose to $65 million in the quarter. That compares with $14 million a year earlier, CNH said.

Adjusted EBIT is the segment profit measure CNH reports. Its Adjusted EBIT margin reached 8.4% in the quarter, from 1.9%.

Third-quarter profit included tariff refunds on past imports. CNH put Construction's net refund benefit at $39 million for the quarter.

For the first nine months, construction net sales reached $2.22 billion. Adjusted EBIT for the nine months was $52 million.

Its Adjusted EBIT margin for the nine months was 2.3%. That is the steadier picture, without one quarter's refund boost.

In full-year 2025, construction net sales were $2.96 billion. Adjusted EBIT was $68 million, a 2.3% margin on a U.S. GAAP basis.

Against those 2025 sales, the $1 billion value is about 0.34 times sales. That is a TickerGrove calculation, not a stated deal term.

Those figures describe CNH's reported Construction segment. CNH does not say the venture's perimeter matches the segment exactly.

CNH also raised its 2026 construction outlook on Monday. It now expects segment net sales to rise 8% to 10% this year.

It expects a full-year Adjusted EBIT margin of 2.0% to 2.3%. That guidance frames the business Kobelco has agreed to control.

The same morning's results

CNH reported third-quarter results separately on Monday. Consolidated revenues were $4.35 billion, essentially flat from a year earlier.

Adjusted Net income was $205 million, up from $109 million. Adjusted diluted EPS, earnings per share, was $0.16.

Reported net income was $35 million for the quarter. It included a $156 million non-cash valuation allowance charge in Brazil.

The charge sat against Financial Services' deferred tax assets there. It lowered reported profit but not the adjusted figures, CNH said.

CNH raised full-year Adjusted diluted EPS guidance to $0.44 to $0.48. The prior range was $0.41 to $0.46.

Closing is more than a year away

The venture will be created through two new companies. They will jointly operate as the joint venture, CNH said.

Closing is expected by the end of 2027. It needs regulatory approvals and other customary closing conditions.

BofA Securities and Goldman Sachs advised CNH on finance. Pillsbury Winthrop Shaw Pittman was CNH's legal advisor on the deal.

Mitsubishi UFJ Morgan Stanley Securities advised Kobelco on finance. White & Case was Kobelco Construction Machinery's legal advisor.

What remains unknown

What remains unknown starts with the final cash amount. Net-debt and working-capital adjustments will fix it only at closing.

Which regulators must approve the deal is also undisclosed. CNH named no countries, filings or approval deadlines in its release.

How Kobelco will finance its purchase is undisclosed. CNH's release does not describe the venture's board or governance split.

When the three-year lock-up begins is also unstated. The release never says whether it runs from signing or closing.

No settled market reaction exists yet for either stock. The announcement landed at 1:30 a.m. Eastern, before U.S. trading.

In Tokyo it arrived at 3:30 p.m., the closing-auction minute. Kobe Steel had no regular session left in which to react.

The 9 a.m. call is the next test

What to watch: CNH's conference call today at 9:00 a.m. Eastern. Executives discuss both the results and the transaction there.

Regulatory filings and any Kobelco disclosure come next. The closing test is whether approvals arrive by the end of 2027.