CNH shares rise 6% after agreeing to sell construction stake
CNH shares rose 6.4% at 9:41 a.m. ET, from a $11.56 close, after agreeing to sell a 70% interest in its Construction Equipment business to Kobelco for $700 million in cash.
Key takeaways
- CNH Industrial (CNH) agreed to sell a 70% interest in its Construction Equipment business to Kobelco Construction Machinery for $700 million in cash. Shares rose 6.4% at 9:41 a.m. ET. Closing is expected by the end of 2027, subject to regulatory approvals.
CNH Industrial (CNH) agreed to sell a 70% interest in its Construction Equipment business to Kobelco Construction Machinery for $700 million in cash. Shares rose 6.4% at 9:41 a.m. ET, from a $11.56 close.
The deal values the business at an enterprise value of $1 billion, before adjustments for cash, indebtedness and net working capital. CNH will keep a 30% stake in the joint venture, CE JV.
The buyers are Kobelco Construction Machinery Co., Ltd. and its U.S. unit, Kobelco Construction Machinery Investment U.S.A. LLC. Parent Kobe Steel, Ltd. has guaranteed their payment obligations.
CEO Gerrit Marx said Kobelco is the right long-term steward for the business. The sale continues CNH's move to become a pure-play agriculture equipment, technology and services company.
CNH expects to use net cash proceeds to reduce debt and strengthen its balance sheet.
Before closing, the Business's U.S. assets will move to Case Construction U.S. LLC, and its remaining assets to Case Construction UK Limited. Immediately after closing, CNH's Indian construction equipment subsidiary will be sold to CE JV.
Closing depends on the expiration of the U.S. Hart-Scott-Rodino waiting period, other merger control and foreign investment approvals, and certain third-party consents. The transaction is expected to close by the end of 2027. Either party may terminate if closing has not occurred by March 30, 2028, extended by two 90-day periods if only regulatory conditions remain. Each party faces a three-year lock-up.
Humayun Chishti, president of CNH's construction segment, is expected to continue leading the business as chief executive after closing.
CNH will report its 2026 third-quarter earnings in a separate announcement later on Nov. 9.