CNH Global N.V. (CNH) recently announced that the company has formed a special committee of independent directors, which includes Thomas J. Colligan, Edward A. Hiler, Rolf M. Jeker, Kenneth Lipper and Jacques Theurillat, to evaluate the merger proposal between Fiat Industrial S.p.A. and CNH.
In late May, Fiat Industrial SpA proposed a merger with CNH Global N.V. (CNH), mainly to form a single company with a single trading stock.
As per the proposal, Fiat Industrial wishes to ameliorate the state of affairs by conflating CNH Global with Fiat Industrial to create one unique firm, which would reduce many complexities. A formal consent would be required from all shareholders of both the companies in order to complete the transaction.
J.P. Morgan and Lazard are the financial advisors of the transaction. The proposed merger is still awaiting the approval of the independent and unconflicted members of the board of directors of CNH.
Fiat Industrial, which currently owns 88% of CNH Global, averred that the merger will not lead to attrition or hamper the ongoing operations of the company. The merger will form a company worth nearly $13 billion with a listing at the New York Stock Exchange and a secondary listing at The Netherlands.
We believe the merger will be quite a profitable venture as both companies sustain a formidable position in the industries, in which they operate. Further, the merger will unite their strengths and elevate their position in the global economy.
We maintain a Neutral recommendation on CNH GLOBAL NV. Our recommendation is supported by Zacks # 3 Rank, which translates into a short-term rating of Hold.
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