CNH Industrial Reportedly Resumes Talks on Possible Iveco Sale
January 06, 2021 at 08:35 am EST
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CNH Industrial N.V. (NYSE:CNHI) has revived talks to sell the bulk of Italian truck group IVECO S.p.A. to China FAW Group Co., Ltd., three people with knowledge of the matter told Reuters. Discussions were put on hold last year after the state-owned Chinese company had made a preliminary offer in July 2020, valuing Iveco at a little more than €3 billion ($3.7 billion). CNH rebuffed the offer because it considered the valuation low, Reuters reported in September 2020. The latest talks come as Changchun-based FAW, which makes heavy duty trucks under its Jiefang brand, looks to expand outside China in the next couple of years, said one of the sources familiar with Jiefang’s thinking. FAW has made an improved offer in the latest discussions and wants to acquire all of Iveco’s commercial vehicles business, including trucks and buses, as well as a minority stake in its FPT engine division, a second source said. An investment in Iveco will help FAW’s Jiefang brand to gain access to the international commercial vehicles market, the first source added. CNH, which is controlled by Exor, the holding company of Italy’s Agnelli family, also held talks with Chinese industrial conglomerate Shandong Heavy Industry Group late last year, said two of the sources. One of the sources added that Shandong Heavy Industry Group Co., Ltd. offered at least €3.5 billion but has been outbid by FAW. The source did not give a figure, saying negotiations are continuing. Separately, Iveco is in talks to jointly develop autonomous truck technologies with Chinese startup Plus, which has a tie-up with Jiefang, one of the sources said. The planned spin-off, initially targeted for early 2021, has been delayed because of the coronavirus crisis. Neither FAW, which has tie-ups with Volkswagen AG and Toyota Motor to make passenger vehicles in China, nor Shandong Heavy Industry responded to requests for comment and a CNH representative was not available for comment. All the sources declined to be identified because they were not authorised to speak to media.
CNH Industrial N.V. is an equipment and services company. The Company is engaged in the design, production, marketing, sale, and financing of agricultural and construction equipment. The Company operates through three segments: Agriculture, Construction and Financial Services. Its Agriculture segment designs, manufactures, and distributes a full line of farm machinery and implements, including two-wheel and four-wheel drive tractors, crawler tractors, grape and sugar cane harvesters, hay and forage equipment, planting and seeding equipment, material handling equipment, and others. Its Construction segment designs, manufactures, and distributes a full line of construction equipment, including excavators, crawler dozers, graders, wheel loaders, backhoe loaders, skid steer loaders, and compact track loaders. Its Financial Services segment offers retail note and lease financing to end-use customers for the purchase of new and used agricultural and construction equipment and components.