7 International
Sensitive discussions
Note-books and negotiations
Warranties and indemnities
Joint celebration
Firm commitment
Strategie fit
Triple-A status
-Towntvllle
Rockhompton
Aucldand -4W
Chriitchurch -A.
The PIBA tietwork.
Besides policy, there was also another very im
portant consideration. 'While we were con-
sidering a second due diligence,'Broekhuyse
recalls, 'we were also involved in a very sen
sitive discussion at home. Would this acqui-
sition hurt our activities and our members
here in the Netherlands? In the end, everyone
agreed our approach in Australia would not
really mean competition for Dutch farmers.
PIBA only services the top end of the market
and these are clients who would have no
trouble obtaining finance from any other
bank. So, we decided to go for it.'
Broekhuyse cannot help laughing when he re
calls the eight-man, second due-diligence
team wandering in and out of rooms in PIBA's
head-office, asking for information and dili-
gently taking notes. 'A lot of the PIBA people
must have realized why we were there,' he
says. 'And it didn't take long for us to see they
liked the idea of becoming part of Rabobank.
Over time, they became increasingly aware of
our agricultural profile and we found our cul
tures matched. We were able to communicate
easily, and my overall impression was that
everyone was high calibre and extremely
knowledgeable.' In its turn, PIBA was eager to
be acquired by a foreign institution because
staff feared they would lose their independent
image if taken over by a domestic bank. But
even though all concerned liked what they
saw, there was still a lot of negotiating to be
done.
'The negotiations were both protracted and
very, very complex,' says Broekhuyse. 'You
ISSUE 35/14 NOVEMBER 1994
need a lot of approvals, from ministries, both
national and state, from both Central Banks,
and so on. But the work really starts when
you've agreed a price and get down to con-
tracts. When you acquire a bank, it is the
quality of the contract that counts when eva-
luating whether you've done a good deal, or
not. You don't want any surprises after you've
acquired the bank, so you have to build com-
prehensive warranties and indemnities into
the contract. From the other side, the vendor
is usually saying: Okay, we've got a sale, give
us the money and the best of luck to you. So,
you have to find a contract form somewhere
in between that is acceptable to both parties.
There's a lot more to buying a bank than
simply taking over its credit portfolio. I was
really happy Dick Schijf, who heads our legal
department, was to play a major role in these
negotiations.'
Firm agreement was ultimately reached on
October 5, a week after the target date. 'We ac-
tually worked on the contract right up until
the signing,' says Broekhuyse. 'It had been put
off because we hadn't received one of the ap
provals - from the Governor General - that
we needed, and in fact the delay was welcome
so we could iron out final details. Once the of
ficial side of things was over, we had a party
and I told our new people a bit about Rabo
bank and what we hoped to achieve in the
future.'
This was the first time Rabo Australia and
PIBA people had got together, but according
to Chris Abbenhuis in Sydney, it won't be the
last as they are already planning a joint Christ-
mas party. PIBA has its own building and
Rabobankers are currently in the process of
relocating their operations to the multi-storey
premises. 'It's a bit strange to suddenly be part
of such a big operation,' he says, 'and some of
the Rabo staff are joking that it's kind of like
a reverse take over because we're moving in
with them. But everyone is really positive
about the acquisition. PIBA is a very com-
plimentary organization and there's little cul
ture difference. And I also think the take over
has shown Rabobank has a firm commitment
to Australia and New Zealand.'
At PIBA, the mood is also one of excitement
and expectation. 'We're delighted,' says Bev
Walters, who will be deputy general manager
of the new operation. 'The response from the
market in both Australia and New Zealand
has been extremely positive and we're getting
great feedback. The wonderful thing about
Rabobank is that it is a focused food and
agribank and that is our core business here,
too.' PIBA brings to the organization a broad-
based, extensive knowledge of the local mar
ket and the prospect of real opportunities for
Rabobank in the region. 'I think the two or-
ganizations form an excellent strategie fit and
our connection with Rabobank will give us a
lot of power at PIBA.'
One of the immediate advantages for PIBA is
re-rating. 'Because Rabobank is a Triple-A in-
Under new management Bev Walters,
Cor Broekhuyse, Henk Gentis and
Chris Abbenhuis.
stitution, we will be granted the same status on
the strength of our ties with the bank,' Wal
ters explains. 'This means a substantially re-
duced cost of funding for us. There is no other
Triple-A in Australia, so in competitive terms,
this is a real benefit. I'd say that this is one of
the reasons why the farming community here
has been so quick to accept the acquisition.
The thinking people among them realize it
will bring more competition to the local lend-
ing market. And that's good news for all con
cerned.' -<
Cotton
AUD/Bal.
UStf/lb
Manufacturing Price
JASONDJ FMAMJ JASONDJ FMAMj JASO
1991 1992 1993
US</Jb cif North Europe (LHS)
Av. AUD/Bale Gross (RHS)
