Fiat to spin-off CNH and Iveco
20 September 2010
Shareholders in Fiat have approved a plan that will see the company's capital goods business demerged from its core car making interests. The new separate company, Fiat Industrial, will comprise construction and agricultural equipment manufacturer CNH and truck maker Iveco among others, and the demerger date has been set for 1 January 2011.
After the split, both Fiat and Fiat Industrial will be separately listed on the Milan Stock Exchange. The demerger will see current Fiat shareholders receive one share in Fiat Industrial for every share they hold in the present company.
A statement from Fiat said, "The demerger will provide strategic and financial clarity to both businesses and enable them to strategically develop independently of each other. Additionally, the Board believes that that transaction would allow for the proper valuation in the capital markets off these two businesses."
Construction and agricultural equipment manufacturer CNH is 89% owned by Fiat, and it sells equipment under the Case and New Holland brands. The remaining 11% of CNH's shares are freely traded. The demerger of Fiat Industrial is not expected to change the ownership structure of CNH other than seeing the transfer of Fiat's 89% shareholding to Fiat Industrial.