Elliott Said to Buy Stake in Agnellis’ CNH Amid Spinoff Plan

(Bloomberg) -- Elliott Management Corp. has built a stake in CNH Industrial NV in a bid for constructive engagement with the truck and tractor maker controlled by Italy’s Agnelli family, according to people familiar with the matter.

Elliott, run by billionaire Paul Singer, sees value-creation potential in CNH’s plan to separate the Iveco truck business from its more profitable agricultural machine unit, the people said.

The U.S. activist investor, known for its shareholder battles at companies like Telecom Italia SpA and AT&T Inc., bought below 3% of CNH earlier this year, according to the people, who asked not to be named because the holding isn’t public.

The stake is valued at around 400 million euros ($440 million) at current market prices.

CNH rose as much as 3.8% in Milan and traded up 0.5%, at 10.23 euros, at 4:41 p.m. local time.

The investment firm has held constructive talks with CNH’s management and its main shareholder, the people said.

Representatives for CNH and Elliott declined to comment. A spokesman for Exor NV, the Agnelli family holding which owns 29% of CNH and 42% of its voting rights, also declined to comment.

Marchionne Style

CNH is seeking to replicate a strategy used by Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne: unlock value by separating businesses which investors rate at different levels.

The Dutch-registered CNH earlier this month unveiled a plan to split its business into two separately listed companies, with agricultural equipment on one side and commercial vehicles on the other.

The idea of separating CNH’s truck business from the more profitable tractor unit has been under consideration for years. Last year, then-Chief Executive Officer Richard Tobin said he’d consider spinning off Iveco after further strengthening CNH’s balance sheet.

Tobin was a close aide of Marchionne, who championed separating businesses in the interest of shareholders. His strategy helped raise the value of the Fiat empire more than 10-fold during his tenure, with spinoffs of Fiat Industrial SpA, which later became CNH, and super-car maker Ferrari NV. Marchionne died last year.

CNH Industrial was created in 2013 through the merger of Iveco producer Fiat Industrial with the CNH agricultural and construction-equipment division.

To contact the reporters on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net;Tommaso Ebhardt in Milan at tebhardt@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Jerrold Colten, Ben Scent

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