Italian truck and tractor major Fiat Industrial and its U.S.-based full line agricultural and construction equipment industries firm CNH Global NV have agreed to merge, whereby Fiat Industrial will acquire 12 percent in CNH that it had not owned already. As per the deal, CNH shareholders will receive 3.828 shares, and Fiat Industrial shareholders one share in the new-formed company.
The merged entity, which is yet to be named, will become the world's third-largest capital goods company by sales and it will be listed on the New York Stock Exchange. The new company will also "use its reasonable best efforts" to be listed on the Mercato Telematico Azionario managed by Borsa Italiana shortly following the closing of the mergers during the second quarter of 2013.
Speaking about the merger, Fiat Industrial's Chairman Sergio Marchionne said in a company release, "We are pleased to have reached agreement on the basis of Fiat Industrial's improved proposal for the merger. Completion of this merger will bring to a conclusion a lengthy process of simplifying and rationalizing the Group's equity capital structure and allow shareholders in both companies the opportunity to participate in the growth prospects of the world's third largest capital goods provider."
The merger is subject to customary closing conditions, including a condition capping the exercise of withdrawal rights by Fiat Industrial shareholders and opposition rights by Fiat Industrial creditors, at €325 million in the aggregate. The merger is also subject to approval by the shareholders of each of Fiat Industrial and CNH.
Fiat Industrial retained Goldman, Sachs & Co. as its financial advisor and Sullivan & Cromwell LLP, Freshfields Bruckhaus Deringer LLP, and Legance Studio Legale Associato as its legal advisors. The Special Committee of the CNH Board had J.P. Morgan and Lazard as its financial advisors and Cravath, Swaine & Moore LLP, De Brauw Blackstone Westbroek N.V., and Bonelli Erede Pappalardo, as its legal advisors.
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