Focus on US food and agri sector: Rabobank US to sell retail unit to Mechanics Bank for US$2.1 billion
19 Mar 2019 --- In line with its international food and agri focus, Rabobank will consolidate its agri-business activities across the US and complete the sale of its subsidiary Rabobank, National Association (RNA) to Mechanics Bank for US$2.1 billion. Last week, Rabobank signed documentation with Mechanics Bank and the transaction is expected to be completed later this year, subject to customary closing conditions. The total consideration amounts to approximately US$2.1 billion, including a material pre-closing dividend and a 9.9 percent stake in Mechanics Bank.
Rabobank has agreed to sell RNA’s retail, business banking, commercial real estate, mortgage, wealth management and other non-food and agri-businesses to Mechanics Bank, a community bank based in Walnut Creek, California.
The parties have also agreed that upon closing of the transaction, Mechanics Bank will provide cash management services to Rabobank’s Dutch clients doing business in the US and Rabo AgriFinance clients in a similar manner as provided by RNA.
“Being part of Rabobank since 2002, RNA has become a leading community bank in California,” says Wiebe Draijer, CEO of Rabobank. “We believe RNA will substantially contribute to the future success of Mechanics Bank, given their complementary retail and commercial banking business and focus on local communities across the state of California.”
This realignment is expected to simplify and enhance Rabobank’s operations in North America and create the fourth largest agricultural lender in the US, providing clients with a unique set of financing solutions and access to Rabobank’s global Food & Agri network. Rabo AgriFinance will service the majority of the current Food & Agri clients of RNA after the transfer of the related assets to that.
“Our Banking for Food strategy is the driving force behind Rabobank’s growth of our international loan portfolio. We are committed to the US, which is the largest agricultural market worldwide and an important growth pillar for Rabobank. When the transition is completed, Rabo AgriFinance will be the only US lender to offer a broad, nationwide view of the agricultural sector coupled with local expertise and global resources,” Draijer explains.
“In the Netherlands, Rabobank is a large retail bank, outside of the Netherlands Rabobank has its focus on international food and agri business. That is why we are selling RNA’s retail, business banking, commercial real estate, mortgage, wealth management and other non-Food & Agri businesses to Mechanics Bank. The same has happened with other non-food and agri business in other parts of the world,” Margo van Wijgerden, a Rabobank spokesperson, tells FoodIngredientsFirst.
Lazard Freres & Co. LLC and Rabobank Corporate Finance Advisory, served jointly as financial advisors to Rabobank in connection with the sale of RNA and the approximately US$5 billion asset transfer to Rabo AgriFinance, according to the announcement.
