Tokyo, Japan (March 29, 2001) - Kobe Steel, Ltd. Kobelco Construction Machinery and CNH GLOBAL
(N:CNH) said today that they have reached an agreement to form a global alliance for the marketing, development and production of crawler excavators worldwide. In addition, the alliance with Kobelco includes distribution of CNH construction equipment in Japan and Asia Pacific region.
The new alliance brings together CNH's construction equipment business, the world's third largest construction equipment maker, and Kobelco, one of Japan's top developers as well as the world's fourth largest producer of hydraulic excavators.
"This is an important strategic step that strengthens our position in the global contruction equipment market," said Paolo Monferino, CNH president and chief executive officer.
The alliance with Kobelco covers CNH brands outside of the Case network worldwide and the Link-Belt network in the Americas, which will continue to be supplied by Sumitomo Construction Machinery in line with the CNH multi-brand and muti-network strategy. The global alliance is subject to the required approval of the relevant regulatory authorities.
With the new partnership, CNH's construction equipment business and Kobelco will adopt a multi-brand and multi-network strategy that will enable them to achieve greater economies of scale, purchasing savings and manufacturing efficiencies, and to further strengthen their distribution capabilities.
"This global alliance will strengthen our ability to serve customers in those regions where we are firmly established. In Japan and other Asian countries, the alliance will provide broader market access through Kobelco's strong distribution system. The excavator product is the pillar around which we will continue to expand our heavy product line. We are very pleased to be offering a best-in-class crawler excavator to our customers around the world based on Kobelco's technology as we are very satisfied with Sumitomo's support of the Case and Link-Belt networks," said Fausto Lanfranco, president of CNH's construction equipment business.
Under the terms of the agreement, CNH would purchase from Kobe Steel a 20 percent stake in Kobelco Construction Machinery. CNH has an option to increase that position up to 35 percent in the future.
In North America, CNH would acquire a 65 percent interest in Kobelco America Inc. that will continue to manufacture and sell Kobelco excavators.
In Europe, CNH and Hitachi have reached a mutual agreement to end their European regional alliance on June 30, 2002, with CNH acquiring the Hitachi stake in Fiat-Hitachi at that time. This alliance did not allow CNH the global reach it required for its excavator business and was preventing Hitachi, which specializes in excavators, from becoming a full-line supplier of construction equipment. CNH found the global partner it was seeking in the new Kobelco relationship, and Hitachi can pursue in the future its plans to become a full-line supplier of construction equipment in regions around the world, with January 2003 as the date for entry in the European market. To best serve the customer, CNH and Hitachi have agreed to a smooth transition, over a period extending through 2003, from the current products to the new products developed under the CNH - Kobelco global alliance.
Upon the exit of Hitachi, CNH's construction equipment business and Kobelco will form a new operation named Fiat-Kobelco, combining Fiat-Hitachi and Kobelco Construction Machinery (Europe) B.V. CNH will control 75 percent of the new entity, in which Kobelco will acquire 20 percent shareholding, with an option to increase it to 35 percent in the future. In Europe, the excavators will be sold under the new Fiat-Kobelco and Kobelco brands, independently of the Case network and brand which will be continuously supported by Sumitomo Construction Machinery.
"Through this global alliance, Kobelco will have an opportunity to become a full line supplier of construction equipment in Japan and Asia Pacific region, leveraging the broad CNH product portfolio that covers every industry segment and enables us to serve customer needs. In addition, through the participation in Fiat-Kobelco, Kobelco will have access to a state of the art manufacturing facility in Europe," said Tsuguto Moriwaki, president and chief executive officer of Kobelco.
In Japan and Asia, Sumitomo will continue to supply the Sumitomo-branded excavators to support their existing dealer network and customers independently.
"CNH is pleased with the good working relationship between Case and Sumitomo over the years. Together they recently launched the new series of Sumitomo-developed excavators in the Americas, Europe and other regions, in support of Case and Link-Belt networks respectively" said Fausto Lanfranco, president of CNH's construction equipment business.
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Kobe Steel, Ltd. is one of Japan's leading steelmakers. As well as suppliers of aluminum and copper products. Other major businesses include welding consumables, infrastructure and plant engineering, industrial machinery, and electronics and information. For the fiscal year ended March 2000, Kobe Steel had consolidated sales of about US$ 11.8 billion. The company has head offices in Kobe and Tokyo, Japan. For more information, please visit www.kobelco.co.jp/indexe.htm
Kobelco Construction Machinery Co., Ltd., wholly-owned by Kobe Steel, is one of Japan's top manufacturers of hydraulic excavators and cranes. Based in Tokyo, Japan, Kobelco has annual sales of approximately US$ 1.3 billion. For more information, please visit www.kobelco-kenki.co.jp/english_index.html
With strong global brands, CNH is a leader in the agricultural equipment, construction equipment and financial services industries. In 2000, the company had revenues of US$ 10 billion, including net sales of construction equipment of approximately US$ 3.5 billion. CNH sells its products in 160 markets through a network of more than 10,000 dealers and distributors. CNH products are sold under the following brands: Case, Case IH, Fiatallis, Fiat-Hitachi, Link-Belt earth-moving equipment, New Holland, New Holland Construction, O&K and Steyr.