Fiat Industrial sweetens takeover offer for CNH Global with cash

Italian truck and tractor maker Fiat Industrial SpA yesterday raised its offer to buy out minority shareholders in its US subsidiary, CNH Global NV (CNH), by adding a substantial cash dividend of $10 per CNH share.

Fiat Industrial, which already holds a controlling 88-per cent stake in CNH, came back with its sweetened offer after its original proposal was rejected on 15 October by a special committee set up by the board of the US farm equipment company. (See: CNH Global rejects Fiat Industrial's merger proposal)

The cash component is 25.6 per cent higher than its original offer designed to create the world's third-largest capital goods company.

The rest of the terms of its offer of 3.828 shares in the new company for every CNH share remain unchanged, which valued the Burr Ridge, Illinois-based CNH at around $1.15 billion.

"Adding this special dividend to Fiat Industrial's May 30 proposal represents a 25.6 per cent improvement over the implied value of the original proposal, plus the value associated with an accelerated distribution," said Fiat Industrial in a statement.

Sergio Marchionne, Fiat Industrial's chairman, said, "While we believe that Fiat Industrial has offered fair and reasonable terms for the CNH minority, if our improved best and final terms remain unacceptable to the Special Committee, Fiat Industrial intends to move ahead.''