CNH Global rejects Fiat Industrial's merger proposal
16 October 2012
US farm equipment unit CNH Global NV yesterday rejected a merger proposed by Italy's Fiat Industrial, a blow to chairman Sergio Marchionne's plan to move the Italian truck and tractor maker's primary listing to New York from its current location in Milan.
Fiat Industrial already holds a controlling 88-per cent stake in CNH, but a special committee of the board of directors of CNH unanimously concluded that the proposal is inadequate and would not be in the best interests of CNH and its shareholders.
''The proposal requires the recommendation of the Special Committee, and the Special Committee has unanimously determined not to recommend the proposal,'' said the Burr Ridge, Illinois-based company in a statement.
In May, Fiat Industrial, which was spun off from carmaker Fiat SpA in 2011, offered to merge with CNH - the maker of Case and New Holland brand tractors, and move its primary listing to New York. The proposed merger is valued at around $1.2 billion.
The deal would create the world's third-largest capital goods company, according to Fiat Industrial, with a product range that includes Iveco delivery trucks, New Holland harvesters and FPT ship engines.
Such a deal would enhance the value of Fiat Industrial to international investors and provide an attractive platform for future growth opportunities, the company's chairman Sergio Marchionne had said, who also serves as CEO of Fiat SpA.