CNH recommends improved merger offer to shareholders

22 November 2012

CNH has agreed to recommend an improved merger offer from majority owner Fiat Industrial (FI) to its shareholders. The offer includes a US$ 10 per share special dividend to minority shareholders which hold just under 11% of the company.

FI owns an 89.1% stake in CNH and in May it proposed a merger that would see it fully acquire the company. This original all-share deal was rejected by a special committee set up by CNH to scrutinise the proposal, prompting FI to come back with a “Best and final offer” that included the cash dividend.

This will see US$ 293 million paid to minority shareholders, and they will control just over 5% of the new corporate entity. According to FI, the new deal represents a 25.6% improvement over the implied value of the original offer.

Commenting on the acceptance, FI chairman Sergio Marchionne said, “We are pleased with the special committee’s determination that it views favourably Fiat Industrial’s improved best and final terms for the proposed merger.”

He added that the documentation for the merger agreement is expected to be finalised in the coming days and that the special dividend to CNH minority share holders should be paid before the end of the year.

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