“I honestly don’t know how you can operate successfully today without being organised along industry lines,”
says Marco Perelli-Rocco, head of consumer and luxury investment and relationship banking at Intesa Sanpaolo, the Italian bank.
His comments come after an incredible run of consumer industry deals for the bank since it was reorganised three years ago.
“It makes relationship banking make sense” he explains.
Certainly the number, size and type of deals have snowballed since the reorganisation. One has followed another, helping to transform the bank’s position on the world stage in terms of investment banking, M&A, bonds, hedging, working capital and trade finance.
The story goes back to 2012, when Intesa decided to rebalance its business away from Italian companies. It redrew its business along sector lines and went on a recruitment drive to increase international experience. Perelli-Rocco came aboard with the remit of attracting more business from abroad.
It was a tall order. Although Intesa, which is Italy’s strongest bank in terms of capitalisation, already had a good number of foreign clients, its role was usually limited to tier 3 or 4 lending – making it a junior banker.
The goal was to become a tier 1 and 2 bank, which would open up more opportunities for it to cross-sell and do business in other fields such as commercial, debt and forex. Kraft, the US conglomerate, proved to be the key.
Kraft was a typical and long-standing client, and Intesa was one of many banks supplying it with credit facilities. That all changed in 2013 when Kraft spun out its non-US consumer business into Mondelez International.
It was clear that the newly-established business was in the market for banking services and Perelli-Rocco flew to Chicago with his New York-based colleague Jordan Schweon to introduce themselves.
“They were a bit doubtful about the idea of retaining an Italian bank among its core group,” he admits. “This is 2013 – not a good time. But in the end they were persuaded by the fact we had always been there for Kraft.” It also helped that Mondelez operated in many of the territories where Intesa also had a presence.
Mondelez proposed that Intesa be part of a newly-negotiated rolling credit facility (RCF) at $50m – the lowest possible amount. But Perelli-Rocco wanted more. “We had our eyes set on cross-selling opportunities and needed to have a greater role in the RCF to be taken seriously for those.”
He got agreement from his boss to try for $150m, which would make Intesa a tier 2 bank for Mondelez. It agreed, scaling back the role of some of its other, bigger banks.
The play worked. Within months, Intesa was involved in Mondelez’s bond offerings and supplier finance. Hedging took a little longer while the necessary ISDA (a legal document setting out scope and responsibilities) was worked out. The relationship was becoming broader and deeper.
This put Intesa in an interesting position when Mondelez switched its coffee business to a joint venture with Master Blenders, calling it Jacobs Douwe Egberts or JDE. The €7.6bn deal created the world’s second-largest coffee player after Nestlé and the world’s largest pure-play coffee company.
Master Blenders took the lead in the venture with a 51 per cent stake, so it led the financing.
We didn’t have a relationship with them but asked Mondelez if they would recommend us. They did and we were invited into the financing talks.
Marco Perelli-Rocco, Head of consumer and luxury investment and relationship banking at Intesa Sanpaolo.
This was the start of another fruitful union.
“We went for inclusion in the tier 2 financing with a €200m commitment” he says.
In the end the involvement of all banks was scaled back and Intesa committed to €120m. But subsequently, it also won JDE’s cash management business in Italy, supplier finance and derivatives business. But the biggest piece of cross-selling was completely unexpected – working with the cosmetics firm Coty on its $9bn purchase of Procter & Gamble’s beauty business.
But that’s another story.
Liquidity is not enough
Home to organisations such as the World Bank Group, Washington DC is a hub for global infrastructure investment. Andrew Davis speaks to Intesa Sanpaolo’s Chief Representative Officer in the city, helping Italian companies secure contracts on the international stage.
Intesa Sanpaolo Corporate and Investment Division, a growing and powerful presence on the world stage
As Italy’s largest bank, Intesa Sanpaolo has the opportunity to expand its business abroad. Giulia Rhodes looks at how new branches in the Middle East and Asia will add to its global footprint
Project finance for the oil industry is anything but crude
How Intesa Sanpaolo has made a niche area its own, becoming a true first port of call.
Transparently better for people and the planet
At Eurizon Capital, success means finding a shared way of seeing the world. Giulia Rhodes hears how Intesa Sanpaolo’s asset-management arm combines innovation and diversification of products with the challenge of sustainability
Doing business better
Advances in global transaction banking mean that Intesa Sanpaolo clients will soon enjoy faster, safer and less stressful ways to pay, says Soppy Buckley.
Cuba: building a new economy
Stefano Stangoni, Intesa Sanpaolo’s global head of financial institutions, tells Giulia Rhodes how the bank, and the Italian economy, are ready for the possibilities of Cuban development
Finance as a force for good
Funding the construction of the Itare dam in Kenya is momentous not just in terms of the project’s high financial value. Giulia Rhodes discovers it’s a symbol of Intesa Sanpaolo’s long-standing commitment to ethical business.
Reaching out to the world
Intesa Sanpaolo serves more than 8 million customers from 1,100 international branches. So it is perhaps no surprise that the head of its International Subsidiary Banks Division should be from Spain. Ignacio Jaquotot explains to Robert Galbraith how innovation is changing the way banking is done around the world.