Fiat Industrial has formally requested a merger with CNH Global and asked that a committee be formed to study the idea. The proposal was set forth in a letter sent today by Sergio Marchionne, chairman of Fiat, to the board of directors of CNH.
Marchionne calls the existing corporate structure “cumbersome and value-restraining.” He suggests creating a “single class of liquid stock listed in New York with a secondary listing in Europe.” The move, he says, would give CNH the “ability to more effectively utilize the financial services and treasury operations of the broader group and achieve greater scale in key emerging markets.”
The merger would create a new holding company, and Fiat wants to complete a transaction by the end of 2012.
Fiat currently owns approximately 88 percent of CNH’s shares.