Note 7 – Business combinations and acquisitions of non-controlling interests
On April 30, 2015 the Group acquired 100% of the share capital of the European tobacco, chocolate confectionary and general packaging operations from MeadWestvaco Corporation for 75 166 TEUR and obtained control. The consideration was paid in cash. The acquired operation includes three plants in Graz (Austria), Krakow (Poland) and Moscow (Russia), and certain additional carton business and related machinery in Svitavy (Czech Republic) which will be operated under the A&R Carton brand. The acquisition is a good fit to AR Packaging’s existing operations and it provides strong growth opportunities. The acquisition is expected to yield substantial synergies related to the market position, purchasing opportunities, manufacturing rationalization and administration costs cutting. The net sales included in the consolidated income statement since April 30, 2015 contributed by the acquired operation was 105 666 TEUR. The acquired business contributed with an operational net profit of 10 546 TEUR for the same period. Had the operations been consolidated from January 1, 2015, the executive management estimates that the consolidated income statement would show a pro-forma net sales of 153 348 TEUR and an operating profit of around 15 900 TEUR for the acquired business.
Effects from acquisition 2015
Recognized amounts of identifiable assets acquired and liabilities assumed:
|Intangible assets, customer relationship||2 600|
|Property, plant & equipment||41 156|
|Trade and other receivables||31 559|
|Cash and cash equivalents||4 489|
|Trade and other payables||-21 071|
|Deferred tax liabilities||-1 355|
|Total identifiable net assets||75 166|
|Total consideration transferred||75 166|
Acquisition-related costs, consultancy fees for due diligence, of 1 682 TEUR have been charged to administrative expenses in the consolidated income statement for the period ended December 31, 2015.
The fair value of trade receivables is 24 116 TEUR. The gross contractual amount for trade receivables is 24 157 TEUR, of which 41 TEUR is provided for as uncertain.
The PPA is to be considered final with regards to the consideration transferred, as the final cash settlement related to working capital adjustments etc. of 8 836 TEUR has been paid.
There were no business combinations during 2013 or 2014. The Group’s purchase of the shares in the Estonian real estate entity Tabasalu Kinnistute OU has been accounted for as an asset deal.
On 5 July 2013, the Group acquired an additional 30% interest in the shares of CC Pack Holding AB, increasing its ownership interest to 100%. Cash consideration of 1 445 TEUR was paid to the non-controlling shareholders. The carrying value of the net assets of CC Pack Group (excluding goodwill on the original acquisition) was 1 169 TEUR. Following is a schedule of additional interest acquired in CC Pack Group.
|Cash consideration paid to non-controlling shareholders||1 445|
|Carrying value of the additional interest in CC Pack Group||1 168|
|Difference recognized in retained earnings within Equity||277|