Orix to acquire Dutch asset manager Robeco
19 February 2013
News, Asia, Global, Japan, Europe, Holland
By Asia Asset Management
Orix Corporation (Orix), Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., (Rabobank) and Robeco Groep N.V., (Robeco) have revealed Orix is acquiring approximately 90.01% of the equity in Robeco from Rabobank, for 1.93 billion euros (US$2.54 billion, 240.2 billion yen). Closing of the transaction is subject to legal and regulatory approvals, which are expected to be completed within six months.
Part of the agreement is a strategic alliance between Rabobank and Orix. This includes Rabobank retaining a 9.99% share in Robeco, and continuing to cooperate in maintaining and expanding Robeco's business platform. Orix will allocate treasury stock to Rabobank as part of the acquisition price, and as a result Rabobank becomes a shareholder of Orix. Also, Orix and Rabobank have agreed that Robeco's banking activities, which are only based in the Netherlands, will be transferred to Rabobank with Robeco retaining its client service relations.
The financial market has drastically changed since the financial crisis and Orix believes that it is necessary to pursue a new business model by combining finance with related services in a strategy called "Finance + Services". As one of the measures to drive this strategy, Orix has been seeking to build its presence in the global asset management industry in recent years, as evidenced by the 2010 purchase of Mariner Investment Group in the US.
Rabobank decided to sell Robeco to Orix, on the basis that becoming part of Orix Group will enhance Robeco's future growth prospects. Robeco is Orix's most significant strategic acquisition to date and it will become Orix's primary platform for future growth ambitions in global markets. Robeco will continue to service customers under its existing brand names.
The rationale for Orix's acquisition of Robeco includes the strength of Robeco's global brand, its diversified range of businesses across asset classes and regions, the breadth of its global distribution network and experienced investments teams. As a well-managed and relatively autonomous group of businesses with a good performance record, Robeco is the ideal vehicle for Orix to pursue its ambitions in global asset management. Growth opportunities also exist in the pension and asset management markets in Asia and Middle East where Orix has an established network.
Orix is committed to support Robeco's 2010-2014 strategy, its services to clients, its investment processes and teams, based on Robeco's long-term commitment to deliver value to clients. Robeco's management board will remain in their current roles with Roderick Munsters continuing as CEO and reporting to Orix headquarters in Tokyo. Robeco Group NV's legal structure will remain unchanged, as will the current governance and reporting lines from Robeco's subsidiaries. Orix will also retain Robeco's Supervisory Board structure including both independent members as well as representatives from Orix.
Last year Robeco achieved record results, demonstrating the strength and resilience of the business, both in the Netherlands and internationally. Robeco's assets under management increased by 26% to 189 billion euros at the end of December (2011: 150 billion euros). Net new cash was also at a record of 18.4 billion euros. Net profit increased from 134 million euros to 197 million euros. Investment performance was also strong with 65% of Robeco's assets outperforming their benchmarks.
Yoshihiko Miyauchi, CEO Orix Group, said: "Robeco is a global company with an outstanding brand and excellent management, well-diversified in all aspects including asset management products, investor clientele, managed portfolio, and regional presence. The management team has displayed tremendous performance over the years and we are confident that they will continue to accomplish this going forward. Orix will pursue further expansion in Europe and the US, as well as growth in Asia and Middle East regions where it has a strong platform."
For Piet Moerland, chairman of the executive board of Rabobank Group, the sale of Robeco is the start of a new beginning. "Rabobank and Robeco have strengthened each other over the past decades by working closely together in serving their clients. This cooperation will remain. Robeco is a solid asset manager, with a track record of being innovative, for instance by introducing pension solutions. Robeco has now the opportunity to develop further under Orix's ownership."
Roderick Munsters, CEO Robeco Group, said: "Just like Robeco, Orix Corporation is a client focused organisation with an entrepreneurial culture. As part of Orix Group, we will continue to serve our clients' best interests and achieve attractive investment returns."
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