UPDATE: Bendigo and Adelaide Bank has bought Rural Finance for $1.78 billion.
The purchase was formalised with the state government early Monday, and the deal is set to be completed by the end of July.
The government has signed a heads of agreement for the sale for a net return of about $400 million.
Treasurer Michael O’Brien and Deputy Premier Peter Ryan said the Victorian government was satisfied that the conditions of the agreement, combined with Bendigo’s experience and positive reputation for rural finance, meant that it was the right opportunity to sell Rural Finance.
“RFC has a proud history as a government-owned agribusiness specialist lender in Victoria and together with Bendigo and Adelaide Bank, have a wonderful cultural fit in terms of community banking that serves rural and regional Victoria,” Mr O’Brien said.
“Following a comprehensive review and a market process, the Coalition government has determined that RFC customers, and broader regional communities, will benefit from these two organisations joining forces."
EARLIER: The bank says Rural Finance, which has an office in View Street, Bendigo, will remain open in 11 locations.
Bank director Mike Hirst said the purchase signalled the growth of the company’s agribusiness operations.
“This transaction brings together two iconic Victorian businesses, both with long and proud histories of serving farmers and communities,” he said.
“In particular we’re pleased that the skilled and experienced staff at Rural Finance will join our organisation, and continue to assist their clients.
“Rural Finance will work together with our existing specialist agricultural business, Rural Bank, to serve more than 5,200 farmers across Victoria – with a loan book in excess of $2.4 billion.”
Rural Finance has operated as a lender in the agricultural industry for more than 65 years.
The acquisition is subject to Australian Prudential Regulation Authority approval.
MORE TO COME