Business Combinations and Disposals
In accordance with IFRS 3, “Business Combinations,” the Company accounts for business combinations by applying the acquisition method as of the date when control over the financial and operating policies is effectively obtained. Any excess of the consideration transferred over the fair value of the net assets acquired is recorded as goodwill, which is allocated to those cash-generating units that are expected to benefit from the business combination. The results of operations of the acquired businesses are included in the Company’s consolidated financial statements from the respective dates of acquisition until the dates of sale. Fair value measurement of assets acquired and liabilities assumed in a business combination is performed in the course of the allocation of the consideration transferred by using standard discounted cash flow methods based on input factors of fair value hierarchy level 3.
Acquisitions in 2014
On December 18, 2014, ALTANA acquired the Brazilian company Overlake Vernizes Gráficos Ltda. (Overlake) through a share deal. The acquired company produces and markets overprint varnishes and will be integrated into the ACTEGA Coatings & Sealants division. The preliminary purchase price of € 12.5 million was paid in cash.
On December 19, 2014, ALTANA acquired the Brazilian companies Premiata Tintas e Vernizes Gráficos Ltda. and Premiata Especialidades Químicas Ltda. (Premiata) through a share deal. The acquired companies produce printing inks and overprint varnishes and will be integrated into the ACTEGA Coatings & Sealants division. Of the preliminary purchase price of € 16.3 million an amount of € 14.8 million was paid in cash in 2014.
The following table provides an overview of the provisional allocation of the consideration transferred to the assets acquired and liabilities assumed by ALTANA as of the acquisition date.
Since the acquisitions were effected on December 18 and 19, 2014, they had no effect in 2014 on consolidated net sales and consolidated net income except for incidental acquisition cost. Had the companies been acquired on January 1, 2014, their business would have contributed € 28.4 million to consolidated net sales and € 1.2 million to consolidated net income in 2014.
The expected synergies from the utilization of the worldwide distribution network of ALTANA, new technologies and the utilization of joint research activities mainly contribute to the goodwill resulting from these acquisitions.
Acquisitions in 2015
The final allocation of the consideration transferred of the Brazilian companies acquired on December 18, and December 19, 2014 resulted in an adjustment of intangible assets of € 0.2 million (see note 13).
Disposals in 2014
ALTANA sold 3.4 % of the ELANTAS Electrical Insulation division’s shares in ELANTAS Beck India Ltd. to comply with legal requirement for companies listed on the Indian stock exchange to reach a free float of at least 25 %. ALTANA recognized € 1.6 million from the sale.