Fiat Industrial and CNH Global announce definitive agreement to combine businesses

Dec. 17, 2012
– Fiat Industrial and CNH Global have announced that they have entered
into a definitive merger agreement to combine the businesses of Fiat
Industrial and CNH. The terms of the definitive merger agreement are
consistent with Fiat Industrial’s final offer announced
November 19. The terms provide that Fiat Industrial and CNH will each
merge into a newly-formed company organized under the laws of the
Netherlands (NewCo). Fiat Industrial shareholders will receive one NewCo
share for each Fiat Industrial share and CNH shareholders will receive
3.828 NewCo shares for each CNH share in the merger.

Pursuant
to the definitive merger agreement, CNH would pay a cash dividend of US$10 per
CNH share to the CNH minority shareholders prior to completion of the merger.
CNH will use its reasonable best efforts for the dividend to be paid prior to
December 31, 2012 or as promptly thereafter as practicable. The cash dividend,
when added to the 3.828 NewCo common shares for each CNH share, represented a
25.6% premium over the implied value of Fiat Industrial’s initial offer as of
November 16, 2012, the trading day prior to the date on which Fiat Industrial’s
final offer was announced. In addition, CNH minority shareholders will benefit
from the dividend being paid prior to completion of the merger.

The NewCo
shares will be listed on the New York Stock Exchange. NewCo will also use its
reasonable best efforts to cause the NewCo shares to be admitted to listing on
the Mercato Telematico Azionario managed by Borsa Italiana shortly
following the closing of the mergers.

NewCo
will implement a loyalty voting structure; shareholders of each company that
are present or represented by proxy at the respective shareholders’ meetings to
consider the merger transaction and that continue to hold their shares until
completion of the merger may elect to receive common shares registered in a
special segment of NewCo’s share register
and be entitled to two votes per share. NewCo shareholders will be entitled to
retain double-vote shares indefinitely. If a NewCo shareholder transfers shares
entitled to double votes, the shares will revert to the regular segment of the
register and will be entitled to a single vote per share. Following completion
of the merger, new shareholders may earn a double vote through a loyalty
mechanism by holding the shares continuously for at least three years.

Sergio
Marchionne, Fiat Industrial’s chairman, stated, “We are pleased to have reached
agreement on the basis of Fiat Industrial’s improved proposal for the merger.
Completion of this merger will bring to a conclusion a lengthy process of
simplifying and rationalizing the Group’s equity capital structure and allow
shareholders in both companies the opportunity to participate in the growth
prospects of the world’s third largest capital goods provider, which will be a
true peer in scale and capital
markets appeal to the other major global capital goods companies.
This appeal will be further enhanced through the loyalty share structure
intended to reward long-term stable shareholders that share our goal of
enhancing shareholder value over the long term, as well as through enhanced
flexibility to pursue strategic opportunities.”

Related Link
www.cnh.com