The Rothschild family has sold a 7.5% stake in its holding company Rothschild Continuation Holdings to Rabobank, a Dutch banking firm in a deal that makes Rabobank the first investor in RCH since December 2005 when Jardine Matheson bought a 20% stake from Royal & SunAlliance Insurance Group.
Rabobank executive board member Sipko Schat (pictured) will join the Rothschild board.
The two companies are teaming up to advise clients and to co-operate on equity, capital markets, and mergers and acquisitions advisory work in the food and agriculture sectors. The deal comes as food manufacturers are investing more heavily in agribusinesses to secure raw material supplies.
The co-operation effort will be led by Maarten ter Haar and Emmanuel Durand, heads of food and agriculture M&A for Europe and the Americas at Rabobank, and Akeel Sachak, global head of consumer at Rothschild.
In a bid to provide deeper access to food and agriculture, the deal is set to help Rothschilds take advantage of Rabobank's close ties with poultry farms in India, Chinese dairies and fishing operations in South Korea.
"There will be competition for primary resources in a way we have not seen before and which people really haven't got their minds around," said Sachak.
Even though the price of many agricultural raw materials dropped from record highs in recent months, demand looks set to remain tight.
The deal struck today marks the first cooperation with another like institution since an equity joint underwriting venture with ABN Amro late last year.
The two institutions are to "pool their respective industry knowledge, resources and relationships while expanding their respective geographic reach and client base through an enhanced breadth of services".
Financials of the deal have not been disclosed.
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