Dutch CNH Global considers merger with Fiat Industrial

Dutch agricultural and construction equipment group CNH Global NV (NYSE:CNH) said it had put together a special committee of independent directors to review the business combination proposal received from Italian majority owner Fiat Industrial SpA (BIT:FI) on 30 May.

Advisors Cravath, Swaine & Moore LLP, De Brauw Blackstone Westbroek NV, Bonelli Erede Pappalardo, JPMorgan Chase & Co (NYSE:JPM) and Lazard Ltd (NYSE:LAZ) have been hired to help the committee with its evaluation, the company said.

The committee comprises independent directors Thomas Colligan, Edward Hiler, Rolf Jeker, Kenneth Lipper and Jacques Theurillat.

In a letter to CNH’s board, Sergio Marchionne, the chairman of Fiat Industrial which owns 88% of CNH, proposed that the two firms tie up into one entity, in a move that would have positive effect on both parties. Marchionne mentioned a simplified corporate structure, larger scale in emerging markets and increased ability to use the financial services of the combined group among the benefits that can be achieved through a merger.

A potential transaction would need to be cleared by CNH’s independent directors committee, the target company said, cautioning that a definitive offer was not certain to result from this proposal and there was no guarantee that a deal would be reached.

CNH sells its products of the Case and New Holland brand families through a network of around 11,300 dealers in some 170 countries. It has 37 manufacturing facilities around the world as of 31 December 2011.

Fiat Industrial makes and sells trucks, commercial vehicles, buses, special vehicles, tractors and agricultural and construction equipment, as well as engines and transmissions for those vehicles and engines for the marine sector.