CNH Global N.V.
) recently announced that the Special Committee of the board of
directors has given the approval for the merger with Fiat
CNH Global had formed a special committee of independent
directors, including Thomas J. Colligan, Edward A. Hiler, Rolf M.
Jeker, Kenneth Lipper and Jacques Theurillat, to evaluate the
Last week, CNH, which competes with bigwigs like
), received a revised merger proposal from Fiat Industrial S.p.A.
(FI). According to news source Reuters, Fiat Industrial raised
the merger offer by 25.6% for the remaining 12% stake. Fiat
Industrial already owns 88% of CNH Global.
The merger between CNH and Fiat will result in the formation
of a new company in the Netherlands. The shareholders of CNH
Global would receive 3.82 shares of the new company for each CNH
share while FI shareholders would receive one share of new
company share for each FI share held. The shareholders of CNH
will also be paid a $10 cash dividend per CNH share before
December 31, 2012.
The merger proposal was put forward by Fiat Industrial in May
this year with an objective of creating a single company with a
single trading stock.
The total consideration represent a premium of over 23% over
Fiat's initial proposal of 3.828 NewCo shares for each CNH share,
as per Fiat's closing stock price on November 23, 2012.
Meanwhile, the new company will adopt a loyalty voting
structure wherein the shareholders participating in
the combined meeting of the two companies to consider the merger
and continue to hold their shares until closing could elect to
have the shares they receive be entitled to two votes per share
until those shares are transferred.
Once the merger is completed, shareholders with single-vote
shares of the merger company would be entitled to earn a double
vote by holding the shares for at least three years.
The merger will be completed in the second quarter of 2013.
The shares of the new company will be listed on the NYSE at
closing with a listing on Borsa Italiana following closing.
We believe the merger will be a profitable venture as both
companies enjoy a formidable position in the industries where
they operate. Further, the merger will unite their strengths and
elevate their position in the global economy.
We maintain a Neutral recommendation on CNH GLOBAL NV. Our
recommendation is supported by a Zacks #3 Rank, which translates
into a short-term rating of Hold.
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CNH GLOBAL NV (CNH): Free Stock Analysis
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