Fiat Industrial Proposes $13-Billion Merger with CNH

May 31, 2012
Plans to streamline holdings for trucks, powertrains, agriculture and construction equipment

Fiat Industrial SpA aims to consolidate its truck and equipment holdings by the end of this year in a proposed transaction to merge the truck and heavy equipment manufacturer with CNH Global N.V.

Fiat Industrial manufactures Iveco trucks and Fiat Powertrain Technologies engines, transmissions, and powertrain products. It already controls a reported 88% of CNH Global, an Illinois-based manufacturer of farming and construction equipment – recognizable as the Case and New Holland brands.

CNH Global confirmed that its directors have received a proposal from Fiat Industrial, and that the board expects to evaluate it through a committee of independent directors.

The proposal calls for establishing a new corporate entity estimated with a value of $13 billion, listed on the New York Stock Exchange, and with a secondary listing in Europe.

"The proposed transaction is a natural extension of the process of simplification of the Fiat world," stated Fiat Industrial chairman Sergio Marchionne said. "This clarity will also make it easier to get financing at favorable costs and give the necessary flexibility for future strategic deals."

Fiat Industrial was established in its current form early in 2011 when Fiat SpA. separated its non-automaking divisions into a single holding company. Its chairman is also the CEO of automaker Fiat SpA.

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