[ragin9120]

The worlds best may be up for sell:

By Marco Bertacche and Francesca Cinelli

April 22 (Bloomberg) -- Fiat SpA may have to sell its CNH Global NV agricultural and construction-equipment unit to fund a partnership with Chrysler LLC, Sanford C. Bernstein Ltd. said.

“Given Fiat’s constrained fund-raising options we are growing increasingly concerned that Fiat may also need to sell its jewel assets to support auto industry expansion,” Bernstein analysts led by Max Warburton wrote in a note sent to clients today. A Fiat official in Turin, Italy, declined to comment.

Auburn Hills, Michigan-based Chrysler, surviving with $4 billion in U.S. loans, has until April 30 to extinguish most of its debt, get a new U.S. labor agreement and form an alliance with Fiat to qualify for as much as $6 billion in additional loans. Fiat Chief Executive Officer Sergio Marchionne has said his company won’t make any cash payment for a stake in the unprofitable U.S. automaker.

Fiat gets almost two thirds of its operating income from the agricultural and truck businesses. A sale of CNH, the world’s second-biggest maker of tractors and combine harvesters, could fetch as much as 8 billion euros ($10.4 billion), Bernstein said. Fiat may also be forced to sell truckmaker Iveco SpA, which could be worth as much as 5 billion euros, the analysts said. CNH and Iveco disposals are “the only remaining source of funds,” Warburton said.

Fiat rose 2.7 percent to 7.48 euros in Milan trading. The stock has surged 63 percent this year, valuing the company at 8.95 billion euros.

 

[mx270a]

Selling a profitable business to buy an unprofitable business that is being sucked dry by the labor force and retirement obligations - Genius.

 

[torn]

yeah, I have to say I don't see it happening. I think Fiat will walk away from the Chrysler deal. There are other ways to get into the US market.

 

[johnnyboy]

Fiat has a history of making bad business decisions and had been questioned back in 1999 when they paid $55 per share to aquire Case Corp. What doesn't make sense is that Fiat's CEO claims that no money is involved with the agreement with Chrysler saying they would be providing technology in exchange for a % chunk of Chrysler. Fiat's main goal, to have a dealer network from Chrysler to sell Fiat cars.

 

[larry]

It isn't unreasonable to sell the most profitable divisions, they have better value and will likely bring a better price. You have to admit, the off-road machinery industry isn't exactly a major growth sector, especially the ag machinery side. Despite current crisis, the automotive industry definitely has a brighter future than ag machinery...way more potential. Most everyone is going to need a car, not a tractor and definitely not a combine.

 

[cliffcutter]

I also think it would be a bad decision to sell a company that's doing a lot better now than it has in years.

Fiat was in the US automobile market before abandoning it in the '70's. There's a thread on this elsewhere.

I've heard that when they merge Fiat and Chrysler together they will rename the company "Fisler". I think that would be appropriate.

 

[agcofan]

Ya I never though any money was to change hands between Chrysler and Fiat? But selling CNH to buy Chrysler doesnt make sense. Wasnt the rumour CAT wanted to buy CNH years ago?

Take care,

Nathan

 

[casefarmer]

That does seem unlikely why would you want to buy chrysler anyway....

U go from haveing good machines to pt cruisers and crappy trucks that drop transmittions every 50,000 miles...

Great idea there!!!

 

[tellarian]

Interesting times - however turn the question on its head - who will buy CNH??

Can think of three, maybe four candidates.

First the none Starters - Deere - problems of their own to get through.

Agco - share price hammered, will be unable and uinwilling to to take it on, also monopoly commission issues.

Komatsu - have had ambitions here before... 3/1

Doosan Daewoo - could get Korean government backing 5/1

A group of the larger Chinese construction / tractor makers 2/1

The Chinese may be favourite. Despite the recession China is sitting on billions of dollars accrued during the boom years. Acquiring CNH will give them global brands, access to latest technology, and the ability to update their own plants.

Fiat are at heart a car company so global ambitions there may sway them.

 

[tbone95]

I sincerely hope that does not happen on so many levels.

 

[ninety420]

can you imagine the ribbing gus would take if a chinese company owned CNH?

On the other hand they say the it usually takes the chinese about 9 months to go from making the worst knockoff product to making the best so maybe if CNH were bought by the chinese they would quickly become the best product. nah I don't think so.

 

[mf3125]

Let them sell to USA investors (Navistar International) And call it International Harvester. Paint them red.

 

[larry]

Has nothing to do with quality. It is all about volume.

 

[greatsilver]

This will prove interesting to see how this plays out.

 

[mf3125]

I,ve read today CNH will drop 4600 Jobs in the USA!!!. Told by Fiat president

 

[casefarmer]

I like that idea.... mf

 

[greatsilver]

If they are going to sell out. I say they get a start being their own company again. CNH should quite well live on as a company. And go from there.

 

[okpanhandle]

I was listening to Europe Today on BBC World Service this morning and they had a story about Fiat wanting to buy Opel, which is currently owned by GM.

 

[kirschenman]

Opel has its own cash and GM has made rumblings of transferring patents to them. It sounds like they really don't need a buyer, just for gm to set them free.

 

[customfarmer82]

I could see Deere stepping in and buying them out to then split it off. I'm sure there is a dollar to be made, and even deere knows that competition is for the greater good. I like the idea of CNH being its own, American company again.