CNH Global, Fiat Industrial Sign Definitive Merger Agreement

CNH Global N.V. has announced that it has entered into a definitive merger agreement with Fiat Industrial S.p.A. to combine their businesses, consistent with the improved terms of the final offer recently made.

On November 19, the Amsterdam, Netherlands-based CNH confirmed receipt of a sweetened offer from Fiat Industrial after the earlier offer was unanimously rejected as inadequate and not in the best interests of CNH and its shareholders. Turin, Italy-based Fiat offered an additional cash dividend to sweeten its offer for CNH shares not currently held by it. Fiat Industrial already owns about 88% of CNH’s shares.

On November 21, CNH announced that its special committee viewed favorably the latest enhanced offer from Fiat Industrial. As per the terms agreed upon, Fiat Industrial and CNH will each merge into a newly-formed company, NewCo, organized under laws of the Netherlands.

Fiat Industrial shareholders will receive one NewCo share for each Fiat Industrial share and CNH shareholders will receive 3.828 NewCo shares for each CNH share in the merger. The merger is expected to close during the second quarter of 2013.

Pursuant to the merger agreement, CNH would pay a cash dividend of $10 per CNH share to the CNH minority shareholders prior to completion of the merger.

The cash dividend, together with the 3.828 NewCo shares, represented a 25.6% premium over the implied value of Fiat Industrial’s initial offer as of November 16, the trading day prior to the date on which Fiat Industrial’s final offer was announced.

The companies said the NewCo shares will be listed on the New York Stock Exchange and will see that the shares are admitted to listing on the Mercato Telematico Azionario managed by Borsa Italiana, shortly following the closing of the mergers.