Fiat Makes Final Offer to CNH

November 20, 2012

Fiat Industrial has submitted what it calls “its best and final offer” regarding the proposed merger of Fiat and CNH and asked for a response by Wednesday night. If the offer is refused, Fiat will proceed with its plans to without CNH participation.

The letter to the Special Committee of the Board of Directors of CNH Global adds a cash dividend of $10 per CNH share to be paid to CNH shareholders priort to the the merger.

The offer preserves the essential components of the original Fiat offer which proposed combining Fiat Industrial and CNH into a new company in the Netherlands (NewCo) in which CNH shareholders would receive 3.828 NewCo shares for each CNH share and Fiat Industrial shareholders would receive one NewCo share for each Fiat Industrial share.

Fiat Industrial has indicated its willingness to defer receipt of the dividend on its 88 percent of the CNH shares in order to preserve the Group’s capital pending completion of the merger. Adding this special dividend to Fiat Industrial’s May 30 proposal represents a 25.6-percent improvement over the implied value of the original proposal, the letter says.

Fiat Industrial said it will withdraw this offer and terminate discussions on the proposed merger unless the Special Committee advises Fiat Industrial by 11:59 pm Eastern Standard Time on Wednesday, November 21, 2012 that it is prepared to recommend the terms of Fiat Industrial’s final offer in their entirety and the parties enter into a definitive merger agreement by Sunday, November 25, 2012.

If this best and final offer is not accepted, Fiat Industrial intends to proceed with the other aspects of the proposed transaction, including the merger of Fiat Industrial with a newly formed company incorporated in the Netherlands with shares listed in New York and Milan. This merger, as well as other steps that Fiat Industrial has discussed with the Special Committee and intends to take, are intended to preserve for Fiat Industrial shareholders most of the expected benefits of the proposed strategic combination with CNH.

“While we believe that Fiat Industrial has offered fair and reasonable terms for the CNH minority,” said Sergio Marchionne, Fiat Industrial’s chairman, “if our improved best and final terms remain unacceptable to the Special Committee, Fiat Industrial intends to move ahead execute all permissible actions within its control, while at all times being mindful and respectful of the rights of the CNH minority shareholders, in which it can achieve for its shareholders the benefits sought through the proposed strategic combination.

“Fiat Industrial will do so by further integrating operations and ensuring that intra-group dealings with CNH are on fully priced arm’s length terms in order to reduce or eliminate any unintended transfer of value to CNH.

“In order to efficiently use capital within the Group, Fiat Industrial would not expect to approve dividends from CNH for the foreseeable future.”