CHICAGO Fiat Industrial
SpA, which manufactures agricultural and construction
equipment, trucks and commercial vehicles, has entered into a
merger agreement with CNH Global NV, which also manufactures a
wide range of agricultural and construction equipment.
"Completion of this merger will
... allow shareholders in both companies the opportunity to
participate in the growth prospects of the worlds
third-largest capital goods provider, which will be a true peer
in scale and capital markets appeal to the other major global
capital goods companies," Fiat chairman Sergio Marchionne said
in a statement Monday.
Under the terms of the
agreement, Fiat Industrial and CNH will merge into a newly
formed company, NewCo, organized under Dutch law. Fiat
Industrial shareholders will receive one NewCo share for each
Fiat Industrial share; CNH shareholders will receive 3.828
NewCo shares for each CNH share.
In addition, CNH will pay a cash
dividend of $10 per share to CNH minority
shareholdersFiat Industrial is an 88-percent
shareholderbefore closing the merger. The dividend and
the 3.828 NewCo common shares for each CNH share represent a
25.6-percent premium over the implied value of Fiat
Industrials initial offer.
Created in 1999 by the merger of
New Holland NV and Case Corp., CNH now comprises the heritage
of three agricultural brands (Case IH, New Holland AG and
Steyr) and three construction equipment brands (Case
Construction Equipment, New Holland Construction and Kobelco).
The company employs 30,000 people at 37 manufacturing
facilities throughout Europe, North America, Latin America and
Asia. CNH reported sales of $14.5 billion through the first
nine months of 2012, a 9-percent improvement from $13.3 billion
in the same period last year.
Fiat Industrial employs nearly
67,000 people at 64 plants primarily in Europe, North America
and South America. Fiat recorded sales of 18.8 billion
($24.36 billion) in the first nine months of 2012, up 7.4
percent from nearly 17.5 billion a year earlier.
The merger, which is subject to
approval by the shareholders of both companies, is expected to
close during the second quarter of 2013.