Fiat Industrial to Merge With CNH Farm Unit

CNH Global N.V. announced that its Board of Directors has received a proposal from Fiat Industrial S.p.A. (FI) regarding a combination transaction between Fiat Industrial S.p.A. and CNH. The proposal was set forth in a letter sent by Sergio Marchionne, Chairman of Fiat Industrial S.p.A., to the Board of Directors of CNH. Fiat Industrial S.p.A. currently owns approximately 88% of CNH’s shares.

The proposal notes that the existing shareholding structure of FI and its affiliates includes the distinct equity securities of FI and CNH. This structure “hinders the group’s ability to capitalize on strategic opportunities that arise from time to time, while inviting arbitrageurs to exploit market inefficiencies at the expense of shareholders of both companies.”

If the deal goes through, the new company would be based in the Netherlands and listed on the New York Stock Exchange with a secondary European listing. FI is also proposing a voting structure with double votes for shares held for more than three years to foster long-term shareholders.

The Board of Directors of CNH expects to evaluate the proposal through a committee of independent directors which would retain independent financial and legal advisors to assist it.

CNH also recently announced that, effective immediately, its subsidiaries will no longer carry out business activity related to products or components where the ultimate destination of such products is known to be Iran, other than to the limited extent required to fulfill already existing binding obligations.