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CNH Rejects Fiat Industrial Merger Proposal

China Agriculture Report By CnAgri2012-10-16 19:24:32China Agriculture Report Print

CNH Global NV rejected a buyout offer from parent Fiat Industrial SpA in a blow to Chairman Sergio Marchionne's plan to move the truck and tractor maker's primary listing to New York from Milan.

Marchionne, who's targeted 25 billion euros in sales for Fiat Industrial this year, is seeking to create the world's third-largest capital-goods company in the combination. The merged entity would have a product range spanning Iveco delivery trucks, New Holland harvesters and FPT ship engines.

CNH rose as much as 97 cents, or 2.4 percent, to $41.23 and was up 2.3 percent as of 12:34 p.m. in New York trading. The stock has gained 14 percent this year, valuing the American company at $9.88 billion. Fiat Industrial fell 3 cents, or 0.3 percent, to 7.81 euros at the close of trading in Milan.Moving Forward

Fiat Industrial proposed May 30 that a new company be created in a share exchange with no premium for CNH shareholders. A recommendation from the committee was a prerequisite for the deal, according to a statement. The CNH committee remains available to consider alternatives should Fiat Industrial amend its bid, it said. JPMorgan Chase & Co. (JPM) and Lazard Ltd. (LAZ) advised the committee.

The Italian manufacturer still wants to go ahead with the combination, it said. Fiat Industrial has asked its advisors to meet with CNH to determine "the basis for this decision and explore whether the parties can reach agreement on revised terms for a merger transaction on a basis broadly consistent with the initial proposal."

Fiat Industrial remains committed to the strategic and financial benefits of the merger, Marchionne said in the statement. Fiat Industrial said it aims to reach a new agreement with CNH within the next several weeks.Debt Crisis

Marchionne said Oct. 12 the merger wouldn't go ahead this year as planned because the European debt crisis had complicated CNH's special committee evaluation.

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