Fiat Industrial shareholders meet to approve CNH merger

TURIN, Italy, July 9 Tue Jul 9, 2013 10:50am EDT

TURIN, Italy, July 9 (Reuters) - Italian truck and tractor maker Fiat Industrial shareholders will vote on Tuesday on a merger with its U.S. division CNH in what may be a template for a later linkup between sister company Fiat and Chrysler.

Italian companies with global operations like Fiat and Autogrill are looking for ways to maximise their foreign revenue to compensate for flat or falling sales in their home market, which has been in a recession for two years.

Fiat Industrial shareholders are expected to approve the cash-and-share merger offer, allowing Fiat Industrial to buy the 12 percent of CNH it does not already own to fully capture the U.S. business's higher profits.

The new company will be listed in New York in addition to Milan, will be registered in the Netherlands, and will probably have its tax residency in the United Kingdom.

The new group will be called CNH Industrial, dropping the word "Fiat" from its moniker, and its center of gravity will shift sharply away from Italy, where Fiat was founded 114 years ago.

CNH shareholders meet to approve the tie-up on July 23.

The new company will introduce a "loyalty share" whereby investors who vote at Tuesday's meeting will receive two votes per share if they hold them to the completion of the merger procedure.

That means Fiat Industrial's controlling shareholder, Exor , will be diluted after the merger but will stay in control because its voting rights will increase.

Fiat Industrial's sister company Fiat is also examining a U.S. listing after a planned merger with U.S. automaker Chrysler, in which it owns a majority stake.

A decision on where Fiat-Chrysler will have its headquarters will be extremely sensitive politically because Fiat is Italy's largest private-sector employer.

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