Proposed Sale to Rabobank Terminated

Omaha-based Farm Credit Services of America  announced the termination of an acquisition agreement with Rabobank.  This came nearly three months after the July 30 announcement that Farm Credit Services of America had entered into an agreement to be purchased by Rabobank, a Dutch-based bank with agricultural interests.

At the 2004 Cattle Industry Summer Conference in August, NCBA members passed a resolution urging members who were also shareholders of Farm Credit Services of America to thoroughly study the issue before voting.  Farm Credit Services of America is an affiliate of the Farm Credit Administration and provides credit to agriculture and rural interests in Iowa, Nebraska, South Dakota and Wyoming.

The Board of Directors of Farm Credit Services of America considered a variety of factors and determined it was in the best interests of its shareholders to terminate the agreement.  These factors, as stated in the company’s news release, included increasing likelihood that approval for the transaction would be delayed and the risks faced by such a delay; a clarification in regulatory position that affects Farm Credit Service of America’s allowance for loan losses; changes in funding practices by AgriBank, FCB which is the funding source for Farm Credit Services of America; Rabobank’s offer to increase the purchase price to $750 million; and the activities of third parties since the original announcement.