Fiat Industrial, the parent company of
CNH Global NV
), recently inched a step closer to fully merge with CNH after
almost all of its shareholders voted in favor of the
cash-and-share merger offer to buy the remaining 12% ownership
stake in the latter.
ARCELORMITTL SA (AMSIY): Get Free Report
CNH GLOBAL NV (CNH): Free Stock Analysis
KUBOTA CORP ADR (KUB): Get Free Report
LINDSAY CORP (LNN): Free Stock Analysis
To read this article on Zacks.com click here.
Fiat Industrial is a leading international auto manufacturing
company that designs, produces and sells vehicles for the mass
market under well-known brands such as Fiat, Alfa Romeo, Lancia,
Abarth, the Ferrari and Maserati. It has also formed a strategic
alliance with premier auto major, the Chrysler Group, to further
expand its geographic presence.
Earlier in Nov 2012, Fiat Industrial inked a definitive merger
agreement to merge its businesses with CNH Global to form a
separate company, organized under the laws of the Netherlands and
listed on the New York Stock Exchange. However, for corporate tax
purpose, the newly formed company will be based in the U.K. as it
has a lower corporate tax rate than Italy.
The strategic merger would enable Fiat Industrial to shift its
base from Italy, which is ravaged by four recessions since 2001.
The successful integration of both the businesses would fortify
the combined entity to compete at the highest level in the
capital-goods sector with adequate flexibility to pursue
inorganic growth at opportune times.
In addition, the combined company is likely to focus more on the
excavator segment as CNH had ended its long-term alliance with
Japanese company Kobe Steel, Ltd. and group company Kobelco
Construction Machinery Co., Ltd. on Dec 31, 2012. Post-merger,
the newly formed company would be the world's third-largest
capital-goods company with a product line spanning Iveco delivery
trucks, New Holland harvesters and FPT ship engines.
The merger is also likely to sow the seeds of a similar endeavor
by serving as a "technical blueprint" for the combination between
Fiat and its Chrysler division in the U.S.
Based in Amsterdam, CNH Global manufactures agricultural and
construction equipments. The company primarily sells and
distributes its products through its dealers and distributors
spread across 170 countries. On Nov 12, 1999, CNH Global was
formed following the merger of New Holland N.V. and Case
Corporation. The company has three operating segments -
Agricultural Equipment, Construction Equipment, and Financial
CNH Global presently has a Zacks Rank #3 (Hold). Other notable
companies in the industry include
ArcelorMittal South Africa Limited
), both carrying a Zacks Rank #2 (Buy), and
), which carry a Zacks Rank #1 (Strong Buy).