Icahn, who is known for buying stakes in struggling companies and then shaking them up with mixed results, had previously maintained that Oshkosh needs new management and a new strategy.
But he had said that he would "move on to other endeavors" if he did not get at least 25 percent of Oshkosh's shares in the tender offer.
Icahn had said that the 25 percent level would show that he has enough support for his plans and would justify the extension of the $32.50 per share tender offer until the Wisconsin-based company holds its upcoming annual shareholders meeting.
But Oshkosh had recommended that shareholders reject Icahn's offer calling it "highly conditional, inadequate and opportunistic." The company had also enacted a shareholder rights plan, known as a "poison pill," which is usually implemented by a business in order to protect the rights of existing shareholders in the event of a hostile takeover.
Oshkosh shares rose to a 52-week high of $31.65 on Nov. 23. They had traded as low as $18.49 in early June.