Fiat Industrial SpA said on Wednesday it wanted to merge its farm equipment unit CNH into the group.
Fiat Industrial said in a statement Wednesday that the goal of the merger would be to simplify the company’s structure to attract international investors, improve its credit rating and facilitate growth.
The proposed deal “is a natural extension of the process of simplification of the Fiat world,” Fiat Industrial Chairman Sergio Marchionne said, noting Fiat Industrial had been demerged from carmaker Fiat SpA in 2010.
The existing Fiat Industrial will be delisted from the Milan exchange at the completion of the deal, according to two people familiar with the matter. The deal will create a single class of shares listed on the New York Stock Exchange, with a secondary listing in Europe, the company said.
The board of CNH expects to evaluate the proposal via a committee of independent directors, which would retain independent financial and legal advisors to assist it.
Investors in both companies would not receive any premium from the transaction since expected cost savings would be minimal, Fiat Industrial said in a statement.
CNH Global N.V. is a world leader in the agricultural and construction equipment businesses. It has approximately 11,300 dealers in around 170 countries.
Fiat Industrial owns 88 percent of CNH, which trades in New York.
CNH shares closed on Tuesday at $41.25.