deals
M&A advances in France
What's NewS Issue 10 December 1999 I y
Combining expertise
Continuing cooperation
>- and 120 dealers throughout this vast
country, and offering the combined exper
tise of DLL, RI and AGCO, and you can
start to get an idea of the opportunities
we see. Massey Ferguson dealers here can
now offer customers the convenience of
true one-stop shopping: they have access
not only to the tractor and any associated
machinery they ntight require, but an
attractive insurance and financing
arrangement as well.'
As a service provider, Agricredit do Brasil
generates and books deals on the balance
sheet of Rabobank International do Brasil
(RIB). The advantage of this arrangement
is that it eliminates the need for a stand
alone banking license, thus avoiding un-
necessary costs and excessive red tape and
making it possible to rapidly set up shop
and leverage all the partner organizations'
combined expertise to a contmon end:
generating added value for our customers
at the lowest overall cost to all the parties
involved.
The Brazilian government provides a sub-
sidv arrangement that enables farmers and
growers to acquire, amongst other things,
needed machinery. While the terms of this
program have attracted only a modest
number of Brazilian banks, which in gen-
eral have neither the agri-related focus nor
the appetite for primary agricultural risk
or the capacity to execute such transac-
tions rapidly and efficiently, other large in
ternational manufacturers of agricultural
machinery, keen to maintain market
share, have recognized the need for spe-
cialized financing arrangements designed
to take advantage of this program.
Under a unique work sharing arrange
ment that characterizes Agricredit do
Brasil, RLs Brazilian arm provides support
in the areas of management, legal, control
audit, IT, structured finance and trea-
sury (ie funding), and operations. On
sales, Agricredit do Brasil has hired three
former AGCO staff that bring extensive
market knowledge and its credit manager,
Eduardo Bresolin, is a 13 year veteran of
AGCO (and its local predecessors). Sales
are carried out by AGCO's professional
team, with its deep market penetration
and intimate knowledge of the players.
AGCO's dealers collect essential financial
information about each loan customer -
and assess the risks. This role is crucial,
particularly in a country of such vast scale
which has evolved its own unique busi
ness traditions and legal practices. Indeed,
the dealers assume partial liability for all
financings, and the capital goods sold
by Agricredit do Brasil are fully insured,
generating an additional premium for the
venture.
Beyond the additional premium income
and reduced risks associated with this
structure, its importance should be seen in
a wider light: one of particular relevanee
as the Rabobank group moves through a
far reaching strategie realignment. While
modest, the Brazilian venture clearly
Toint efforts by the M&A teams in Paris
I and Amsterdam recently bore fruit in
the form of a major deal between Sias-
MPA, a subsidiary of France's Pernod Ri-
card group which is a leading global pro
ducer of fruit preparations, and a major
player on the European dairy market.
Sias-MPA, with annual sales of EUR 460
million and 22 factories worldwide, has a
special expertise in developing fruit prepa
rations for the food industry. The Paris
M&A team including Jacques Ropartz
and Jean-Fran^ois Cruciani, was able to
convince Sias-MPA that the European
dairy cliënt (and RI) would be an ideal
long term partnership. The team in Ams
terdam and Utrecht, including Joost Ver-
heijen and Tjebbe de Jong, opened doors
into the upper echelons of the dairy's
management, and the result was the re
cent signing of a seven year contract un
der which the French company will de-
liver raw material to the dairy, which in
turn can prune costs associated with its
production of fruit based products.
Jacques Ropartz and Marine Paugct of the
Paris M&A team also recently acted as
exclusive financial advisors to André
Quancard André (AQA), a medium sized
Bordeaux based winc shipper, in its sale of
shows how multiple business partners
front different backgrounds can tailor an
innovative and profitable operation that
meets the unique challenges associated
with the local business context.
Says Dauernheimer, who was detached
front Rabobank to serve on the Agricredit
iniriative and has now joined the venture
full tinte: 'there is no other area witliin the
Agricredit nor DLL network where our
cooperation with RI is so close. Without
the continuing assistance of the RIB team,
especially front Victor den Hoedt (deputy
GM) but also front the former and current
GMs, Willem Cramer and Arnout van
Schelven, Agricredit do Brasil would not
have existed.'
a strategie 8% stake to two Japancse
groups, Itochu Corporate and Godo Shu-
sei. The owners of AQA, a former family
held firm with annual sales of EUR 39
million, were seeking partners to prepare
for the family succession and also to in-
crease their financial capacity to expand,
for instance through the acquisition of
vineyards or other shipping interests. This
is, of course, a market in which RI offers
special expertise. Godo Shusei, a manu-
facturer of alcoholic beverages, and
Itochu Corporate, a specialized trading
firm, are both listed on the Japanese stock
exchange. The two firms were already
commercial partners of AQA and were
keen to reinforce the long term relation-
ship. Indeed, as part of the deal negotiated
by the RI team, they also agreed an exclu
sive distribution agreement with the
French firm.
