Italy’s Fiat Industrial finalises merger with Dutch CNH Global

Fiat manufacturing plant in Turin, Italy

Italian truck and heavy machinery maker Fiat Industrial SpA (BIT:FI) has sealed a definitive deal to merge with Dutch agricultural and construction equipment maker CNH Global NV (NYSE:CNH), the two parties said today.

The terms of the transaction coincide with those of Fiat Industrial’s final bid for the shares it did not already own in CNH, which was approved last week by the target’s special committee. The offer is 25.6% higher than the original one, launched at the end of May and involving a share swap with no premium for CNH shareholders.

The offer includes a USD10.00 (EUR7.71) per share special dividend for CNH shareholders, who will get 3.828 shares in the enlarged entity for each share they own. Fiat Industrial investors will receive one share in the new company for each share they hold.

Under the terms of the merger deal, Fiat Industrial, owner of some 88% of CNH’s stock, will merge with the Dutch firm to form a new holding entity based in the Netherlands with a primary listing in New York and a secondary listing in Europe.

The combination hinges upon customary closing conditions, including approval by both companies’ shareholders, and is seen to be completed in the second quarter of 2013. Fiat Industrial said it would vote its CNH shares in favour of the merger at the CNH shareholders’ meeting.

Goldman, Sachs & Co acted as financial advisor to Fiat Industrial, whereas Sullivan & Cromwell LLP, Freshfields Bruckhaus Deringer LLP and Legance Studio Legale Associato served as its legal advisors. JP Morgan Chase & Co (NYSE:JPM) and Lazard Ltd (NYSE:LAZ) provided financial advice to CNH Global’s special committee and Cravath, Swaine & Moore LLP, De Brauw Blackstone Westbroek NV and Bonelli Erede Pappalardo counselled it on legal matters.

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