CNH Agrees to Fiat Merger

November 26, 2012

CNH and Fiat Industrial have announced an agreement for their merger into a new company (no name has been announced for the new company, NewCo), organized under the laws of the Netherlands. Fiat Industrial shareholders will receive one NewCo share for each Fiat Industrial share and CNH shareholders will receive 3.828 NewCo shares for each CNH share in the merger.

The deal is based on the offer Fiat made last week to include a $10 cash dividend per share for CNH shareholders

NewCo shares will be listed on the New York Stock Exchange and efforts will be made to be admitted to listing on the Mercato Telematico Azionario managed by Borsa Italiana shortly following the closing of the mergers, the companies said in a joint statement.

“We are pleased to have reached agreement on the basis of Fiat Industrial’s improved proposal for the merger,” said Fiat chairman Sergio Marchionne. “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, which will be a true peer in scale and capital markets appeal to the other major global capital goods companies. This appeal will be further enhanced through the loyalty share structure intended to reward long-term stable shareholders that share our goal of enhancing shareholder value over the long term, as well as through enhanced flexibility to pursue strategic opportunities.”

The loyalty voting structure provides that shareholders of each company that are present or represented by proxy at the respective shareholders’ meetings to consider the merger transaction and that continue to hold their shares until completion of the merger may elect to receive common shares registered in a special segment of NewCo’s share register and be entitled to two votes per share. NewCo shareholders will be entitled to retain double-vote shares indefinitely. If a NewCo shareholder transfers shares entitled to double votes, the shares will revert to the regular segment of the register and will be entitled to a single vote per share. Following completion of the merger, new shareholders may earn a double vote through a loyalty mechanism by holding the shares continuously for at least three years.

The merger is expected to close in the second quarter of 2013.