Kobe Steel, Kobelco Construction Machinery and CNH Global end alliance
By Kobelco Construction MachineryNews
Jan. 11, 2013 - Kobe Steel and group company Kobelco Construction Machinery have announced that the initial term of their global alliance with CNH Global N.V. ended on December 31, 2012. The parties determined not to renew their agreement.
Jan. 11, 2012 – Kobe Steel and
group company Kobelco Construction Machinery have announced that the
initial term of their global alliance with CNH Global ended on December
31, 2012. The parties determined not to renew their agreement.
The global alliance, which began
in January 2002, was set for a 10-year period. With the market environment
changing over the past 10 years, Kobe Steel, Kobelco Construction Machinery and
CNH have been re-examining the agreement and discussing the future of their
global alliance. Looking ahead at future market conditions, Kobelco
Construction Machinery and CNH have mutually decided to operate their
businesses on their own, and with the initial term of the original agreement
ending on December 31, 2012, the three companies decided not to renew their
The cooperative relationship
among the three companies for 10 years under the global alliance has been
meaningful and significant. From now on, while respecting their positions,
Kobelco Construction Machinery and CNH will grow their own business
operations throughout the world.
Under the global alliance with
CNH, Kobelco Construction Machinery's sales
and marketing rights were limited to the Asia and Pacific area, including
Australia. From January 1, 2013, Kobelco Construction Machinery will market and
provide services on its own in North America, Europe, South America, the Middle
East, Africa, and the CIS countries.
With the ending of the global
alliance, equity participation
with CNH will also be terminated. At the end of the year, Kobe Steel will buy
back the 20-percent equity that CNH currently holds in Kobelco Construction
Machinery. As for the equity that Kobelco Construction Machinery holds in CNH's
affiliate companies, the shares will be sold back to CNH.
After the initial term of the
global alliance ends, CNH will continue to be entitled to manufacture and sell
hydraulic excavators currently licensed from Kobelco Construction Machinery. In
addition, for a five-year period until the end of December 2017, CNH will have
the right to procure hydraulic excavators from Kobelco Construction Machinery
on an OEM basis. Servicing parts will continue for 10 years.
Kobelco Construction Machinery
will have the right to receive running royalties for the licensed hydraulic
excavators manufactured by CNH for a five-year period until the end of December
In September 2001, Kobe Steel,
Kobelco Construction Machinery and CNH signed an agreement to form a global
alliance. In January 2002, Kobe Steel transferred 10 per cent of its shares in
Kobelco Construction Machinery to CNH. In addition, Kobelco America Holdings
Inc. transferred 65 per cent of its shares in Kobelco Construction Machinery
America LLC to CNH.
In July 2002, Kobe Steel
transferred an additional 10 per cent of its shares in Kobelco Construction
Machinery to CNH. Kobelco Construction Machinery transferred 100 per cent of
its shares in Kobelco Construction Machinery (Europe) B.V. to CNH. At the same
time, Kobelco Construction Machinery received from CNH 20 per cent of the
shares in New Holland Kobelco Construction Machinery S.p.A., a manufacturing
and sales unit in Europe.
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