Tokushima Worldwide: Fiat and CNH Approve Deal.
Tokushima Worldwide - Fiat Industrial have won shareholder support for their $1.5 billion offer for CNH Global.
New Jersey (I-Newswire) January 18, 2013 - Tokushima Worldwide reportedly announced in a recent meeting that a spokesperson for Fiat Industrial SpA confirmed that its improved offer to buy out minority shareholders of CNH Global had met with approval from a committee of directors of the US firm. They stated that the merger agreement could be finalized in the near future.
Analysts say the new structure will make it easier for Fiat Industrial to deploy an estimated $5 billion in cash attributed to CNH. Fiat Industrial will now directly control that money, as well as CNH's other assets. As part of the merger, the CNH board would be dissolved and the new company will be directed by a single board and a consolidated management team.
Fiat Industrial is reorganizing in response to the debt crisis in Europe. Its Iveco truck unit announced plans in July to shut five plants in Europe by the end of 2012 because of the sovereign-debt crisis in the region.
CNH CEO Richard Tobin was appointed chief operating officer for Fiat Industrial to help with the integration. JPMorgan Chase & Co. and Lazard Ltd. (LAZ) advised the CNH committee.
The two groups will be merged into an as yet unnamed new company in which investors will receive 3.828 shares per CNH share, and one share per Fiat Industrial share. The company will have a secondary listing in Milan.
Sergio Marchionne, chairman of Fiat Industrial, said shareholders approved the deal at a special shareholders meeting in Amsterdam. Marchione said that he expects the European car market in 2013 to perform “at the same level as 2012, probably slightly better, but I am probably the only optimist in this business right now.”
“In the U.S. and Latin America, the market will do well,” he added. The new company is to introduce a "loyalty share" whereby investors who voted at a shareholder meeting will receive two votes per share if they hold them to the completion of the merger procedure.
Fiat Industrial added a $10 per share cash dividend, amounting to $288 million, to the original stock offer of 3.828 shares for each CNH share that Fiat does not already own. The committee stated that it held a favorable view of the offer and instructed their advisors to negotiate with Fiat to turn the offer into a definitive agreement.
On Nov. 22, CNH and Fiat Industrial reached a preliminary agreement for a cash and share deal that would see Fiat Industrial acquire the 12 percent of CNH it did not own. The new company is to introduce a “loyalty share” whereby investors who voted at a shareholder meeting will receive two votes per share if they hold them to the completion of the merger procedure.
Tokushima Worldwide allegedly commented that as no official announcement has been made, the new company would keep its Milan listing, but would have its primary listing in New York.
CNH is a construction machinery and tractor company which is already 88% owned by Fiat Industrial. Fiat Industrial are hoping that the combined firm will receive a higher valuation in the eyes of the market, as strong US revenue have seen CNH account for over 60% of revenues for the combined group.
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Published On:January 18, 2013
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