Earlier this week, Fiat Industrial SpA proposed a merger with
CNH Global N.V.
). The primary intent behind the proposal is to form a single
company with a single trading stock.
A letter was sent by Fiat Industrial chairman Sergio Marchionne
to the Board of Directors of CNH Global. As per this document, Fiat
Industrial wishes to ameliorate the state of affairs by conflating
CNH Global with Fiat Industrial to create one unique firm which
would reduce many complexities. A formal consent would be required
from all shareholders of both the companies in order to complete
Fiat Industrial, which currently owns 88% of CNH Global, averred
that the merger shall not lead to attrition or hamper the ongoing
operations of the company. Rather, this momentous event would give
birth to a company worth nearly $13 billion with a listing at the
New York Stock Exchange and a secondary listing at The Netherlands.
We believe this to be quite a profitable venture as both companies
sustain a formidable position in the industries they pertain to and
the merger will only unite their strengths and elevate the position
even more in the global economy.
However, the presence of ominous rivals in the industry is
something CNH Global should guard itself against. Big players in
this regard include
Titan International Inc.
The current Zacks Consensus Estimates for the second quarter of
fiscal 2012 and for fiscal 2012 are $1.52 per share and $4.69 per
share, respectively. The company currently retains a Zacks #1 Rank,
which translates into a short-term 'Strong Buy' rating. We also
have an 'Outperform' recommendation on the company's stock.
AGCO CORP (AGCO): Free Stock Analysis Report
CNH GLOBAL NV (CNH): Free Stock Analysis Report
KUBOTA CORP ADR (KUB): Free Stock Analysis
TITAN INTL INC (TWI): Free Stock Analysis
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