Growing in California
12 December 2002 marked the formal approval of a process to acquire 100% of VIB Corps common
stock by the Rabobank Group in an all cash transaction. On that date, all necessary regulatory
approvals - from the Dutch Ministry of Finance, the Federal Reserve Board and the California
Department of Financial Institutions - were on the table. A week earlier, shareholders had given
their approval for the deal which will open up the world's largest agri-producing region for
Rabobank. On 28 December the acquisition was completed and VIB became a full member of
Rabobank.The Word looks at our latest entry into 'country banking'.
Big numbers
Huge market
Milestone dates always grab
attention. However, the mile-
stones for the launch of 'country
banking' in the US are no more than
datelines in what has been a lengthy
process, started back in 2001. Says
Cor Broekhuijse, who launched the
concept in Australia through the
Primary Industries Bank of Australia
(PIBA), and who was appointed
Regional Manager Americas on 1
September 2001'Given my experi-
ence with PIBA, "country or com-
munity banking" was high on my
priority list. The Managing Board
was convinced the US would offer a
very attractive market for us, so we
started looking at ways to get into
the agri-production business here.'
Broekhuijse hired an investment
bank with specific expertise in finding
likely acquisition prospects. And he
brought in Henk Adams to help
identify a possible country bank to
form a platform for further growth
in what is a new move for us in the
US. 'In the meantime,' he continues,
'I asked all our US Managers to
come up with ideas to help develop
our business in the US. Lizz Hund
and her team in San Francisco were
very keen to focus our attention on
California and on agri-production.
They suggested we launch a corpo-
rate farming division which would
dovetail nicely with any acquisition
of a rural bank in that region. This
proposal was welcomed, not least
because I agreed with the Managing
Board that we were under-invested
in this region.'
A brief look at the Californian mar
ket explains why attention began to
be focused clearly on this region.
Says Hund, who heads up the western
region of the US, 'Over time, we've
built up a good corporate banking
business here in the region. And we
were always talking about how much
potential there is here. Just let me
give you a few numbers. California
is the largest agricultural producer in
the world. We are talking about
USD 42 billion every year. It is the
fastest-growing and most ethnically
diverse region in the US. We tend to
be the innovators, the trend-setters
for the rest of the country. And Cali
fornia is the gateway to the Pacific
Rim.'
Given this environment, for ntany
people in Rabobank International
(RI) the question was: with
Rabobank's knowledge of Food and
Agribusiness (F&A), why aren't we
/4 'The Word I