tf)LL - LEASING FOR
North America
RUSSIAN MANDATE
WHAT'S News Issue 1 January 1997
info exchange
13
Rabobank Nederland's wholly-owned subsidiary, De Lage Landen, has finalized
an important strategie ailiance with AGCO Corporation, the Duluth, Georgia-
based manufacturer and distributor of agricultural equipment and related parts
with 1995 annual sales of USD 2.1 billion. Among other things, AGCO sells
tractors, combines, hay tools, forage equipment and implements through some
7,000 independent dealers and distributors worldwide - making this a truly F&A
partnership.
Under the joint venture, our De Lage
Landen vendor leasing and factoring
subsidiary has acquired a 51 percent stake
the Agricredit Acceptance Company (or
AAC'), AGCO's North American retail
finance subsidiary with a portfolio valued
at over USD 50 million and a work force
of 145 people. The aim of the ailiance is
to expand retail financing in emerging
world markets, to maintain economies of
scale and scope in relation to competing
firms, and to develop a global business
format for expansion into other financial
services.
EFFICIËNT FLOWS
'There has been a trend toward
"disintermediation" in financial markets
lately, with fewer bankers acting as
intermediaries in financial transactions,'
says Larry Sidwell, the New York-based
Rabobanker who is the new CEO of the
•int venture. 'Suppliers, distributors and
anufacturers are more active players in
finance to their customers, providing a
more efficiënt flow of capital to the end
user,' Sidwell explains. 'This creates an
opportunity for AAC to help suppliers
manage the financial aspects of their
customer relationships, to improve cash
flow for the company and improve the
balance sheet of the vendor. It also permits
these companies to focus on their core
business of selling their products.'
DE LAGE LANDEN -
JOINT-VENTURE IN
0K DE V.S.
De Lage Landen heeft een
strategische alliantie gesloten met de AGCO
Corporation, de in Georgia gevestigde
fabrikant van landbouwmachines. De
j»pgerichte joint-venture verzorgt de
^Wnanciering van de verkochte machines. De
constructie is hetzelfde als de reeds
bestaande overeenkomst met AGCO in
Europa, Massey Ferguson.
EUROPEAN VENTURE
AGCO's preexisting joint venture with
Rabobank and De Lage Landen in Europe
is Massey Ferguson Finance, which
provides financing to Massey Ferguson
dealers in the UK, France and Germany. A
farmer who leases a tractor from a Massey
Ferguson dealer also has a Massey
Ferguson-branded loan, although he is
actually doing business with a joint
venture in which De Lage Landen holds
the majority stake.
INTERNATIONAL EXPANSION
The new joint venture, which is
headquartered in Des Moines, Iowa,
expands De Lage Landen's extensive pan-
European operations to the US and
Canada and furthers its strategy of
international growth. AAC will focus on
agricultural retail finance operations in the
US and Canada. The deal has an
additional advantage for AGCO
Corporation, which will retain a 49
percent interest in the AAC financing
venture, in that it will permit AGCO
to deleverage some USD 500 million from
its Consolidated balance sheet. It will also
make it possible to redeploy some USD 40
million in capital and to participate in
third-party agricultural receivable business
with Rabobank.
F.l.t.r. Ton Toeboscb
(DLL Ebidhonen),
Phil Green (DLL
UK), Larry Sidwell
(AAC) and Dennis
Ziengs (New York
Branch).
Rabobank International has won a prestigious and strategically
important mandate from the European Bank for Reconstruction and
Development (EBRD) to set up and manage an initiative in Russia
known as the Black Earth Regional Venture Fund.
Named after a traditionally fertile Russian area that sprawls over five administrative
regions, the Black Earth Fund will seek to stimulate local entrepreneurial initiatives,
investments, and capital markets by means of participating in the equity of new
ventures.Ten percent of its total USD 30 million funding will be provided by a
Rabobank-led syndicate known as Rabo Black Earth BV.The shares related to the
investments will eventually be floated on the open market. 'Coming on the heels of
our Russian joint venture between RIAS,Agroprombankand Interagrofond
announced last November, this marks a further step in our strategy to gain contacts
and expertise in an important emerging agribusiness market,'explains Jaap Kool,
who is responsible for development of business and offices in Central and Eastern
Europe.
