CNH Global N.V.
) recently announced certain changes in its global alliance with
Kobelco Construction Machinery Co., Ltd. The agreement is about
to move into the next phase, which will feature non-exclusive
licensing and supply agreements between the two companies.
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This change in alliance will be effective from January 1, 2013
where CNH Global and Kobelco Construction Machinery will exit
their current joint ownership and equity participations in all
the companies and do away with any exclusive geographic rights.
Under the terms of the agreement, CNH will continue manufacturing
hydraulic excavators with technology from Kobelco and will
procure certain models from Kobelco for atleast five years. In
addition, it will continue to procure component parts from
Kobelco for atleast ten years.
The strategic move by CNH global is aimed toward a stronger
future for the company's global customers, dealers and overall
business with complete ownership of business in all regions. The
new agreement will also enable the company to directly operate in
the growing construction equipment markets like Asia-Pacific.
CNH Global reported EPS of $1.34 in third quarter 2012 versus
$1.14 in the prior-year quarter. The rise in net income was led
by the company's impressive performances in the agricultural,
financial and industrial services businesses neutralizing the
negative effects of the currency translation and high research
and development expenses during the quarter.
Headquartered in Amsterdam, CNH Global is a manufacturer of
agricultural tractors, combines, and construction equipment. The
company's operations are organized into three business segments:
agricultural equipment, construction equipment and financial
CNH Global currently has a Zacks #3 Rank, which translates into a
short-term Hold rating. We also have a long-term Neutral
recommendation on the stock. One of its competitors,
) also holds a Zacks #3 Rank.