Rabobank and Farm Credit Services of America, ACA today announced that they have entered into a Settlement Agreement resolving all issues between the parties regarding the termination of a Merger Agreement announced on July 30, 2004.
Pursuant to the terms of the Settlement Agreement, each party agrees that the Merger Agreement is terminated and releases the other party from any further claims by it under the Merger Agreement.
On Oct. 21, 2004, FCSAmerica notified Rabobank of the decision by its board of directors to terminate the Merger Agreement. As part of the settlement, FCSAmerica has agreed to pay Rabobank four installments of $2.5 million over the next year.
The two firms agreed to this settlement amount in order to achieve an efficient and mutually satisfactory resolution of the Merger Agreement, including the applicability of provisions providing for a termination fee and expense reimbursement of $13.5 million payable by FCSAmerica in certain circumstances.
Cor Broekhuyse, head of the Americas for Rabobank International, said, “Although we remain disappointed, we affirm Rabobank’s long-term commitment to American agriculture and are moving forward with plans to increase our investment in the U.S. market. By growing our existing businesses and exploring further partnership opportunities, we are moving closer to our goal of providing one-stop shopping for America’s farmers and ranchers. We look forward to serving customers with a full range of superior financial services and products, all tailored to the special needs of agriculture producers.”
Paul Folkerts, chairman of the FCSAmerica board of directors, said, “While we continue to believe that unprecedented activities during the ‘quiet period’ of the process interfered with our ability to complete the merger, our board carefully considered the prospects of extended negotiations to resolve this matter and determined that it was in the best interest of FCSAmerica to settle all outstanding issues with Rabobank over the termination of the Merger Agreement.
“This settlement allows us to move forward to secure leadership for the company and continue to be the leading agricultural lender to farmers, ranchers, agribusiness and rural residents in Iowa, Nebraska, South Dakota and Wyoming.”