Samsung 2010 Annual Report Download - page 45

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33. Business Combination
The Company acquired Samsung Digital Imaging Co., Ltd. with a closing date of April 1, 2010 to improve shareholders’ value through
enhancement of business efficiency and maximization of synergy effect with other existent businesses. The acquisition of Samsung Digital
Imaging Co., Ltd. was approved by the Board of Directors of the Company on December 15, 2009. None of the goodwill recognized is
expected to be deductible for income tax purposes.
(1) Overview of the acquired company
(2) Terms of the business combination
The shareholders of Samsung Digital Imaging Co., Ltd. received 0.0577663 shares of the Company’s common stock for each share
of Samsung Digital Imaging Co., Ltd. common stock owned on the closing date. The Company transferred its treasury stocks to the
shareholders of Samsung Digital Imaging, instead of issuing new stocks to them.
(3) Purchase price allocation
The following table summarizes the consideration paid for Samsung Digital Imaging Co., Ltd. and the amounts of the assets acquired and
liabilities assumed recognized at the acquisition date.
Name of the acquired company Samsung Digital Imaging Co., Ltd.
Headquarters location Suwon-si, Gyeonggi-do Korea
Representative director Sang-Jin Park
Classification of the acquired company Listed company in the Korea stock exchange
Former relationship with the Company An associated company
Classification Amount (In millions of Korean Won)
I. Considerations transferred
Fair value of consideration transferred (*1)
￦
812,154
Fair value of previously held equity interest in the acquiree (*2) 278,949
Total
￦
1,091,103
II. Identifiable assets and liabilities
Cash and cash equivalents 63,470
Trade and other receivables (*3) 290,407
Inventories 88,133
Property, plant, and equipment 40,678
Intangible assets 307,454
Other financial assets 75,202
Trade and other payables (213,454)
Short-term borrowings (83,660)
Long-term trade and other payables (62,125)
Retirement benefit obligation (24,574)
Deferred income tax liabilities (14,711)
Total
￦
466,820
III. Goodwill (*4)
￦
624,283
(*1) The Company transferred its treasury stocks to the shareholders of Samsung Digital Imaging Co., Ltd and re-measured the transferred treasury stock
at its acquisition-date (April 1, 2010) fair value. The Company recognized KRW 398,090 million of gain on disposal and has paid KRW 15,921 million for
the odd-lot prices.
(*2) The Company held 25.5% of equity interest in Samsung Digital Imaging Co.,Ltd. and remeasured its previously held equity interest at its acquisition-
date (April 1, 2010) fair value. Accordingly, the Company recorded resulting gain of KRW 216,747 million.
(*3) Fair value of acquired trade and other receivables (KRW 290,407 million) include trade receivables amounting to KRW 274,369 million. Total nominal
amount of the receivables is KRW 290,407 million, and none of them are expected to be uncollected.
(*4) The goodwill is attributable to increased efficiency of digital camera business management and the synergy effect expected from combining Samsung
Digital Imaging Co., Ltd. and the related existing businesses.
If the acquisition had occurred on January 1, 2010, the consolidated revenue and net profit for the year ended December 31, 2010 would
have increased by KRW 421,513 million and KRW 14,753 million, respectively. The amounts of revenue and net profit of the acquiree since
the acquisition date (April 1, 2010) included in the consolidated statement of income for the year ended December 31, 2010 are KRW
2,264,243 million and KRW 63,228 million, respectively.
34. Events after the Reporting Period
1) Merger of Samsung Gwangju Electronics
The Company acquired Samsung Gwangju Electronics with a closing date of January 1, 2011 to improve shareholder value through
enhancement of business efficiency and manufacturing competitiveness in the digital media (appliance) business. The approval of the Board
of Directors of the Company replaces shareholders’ meeting approval of the acquisition, as the acquisition of Samsung Gwangju Electronics
is a small and simple merger as defined in the commercial law.
(1) Overview of the acquired company
(2) Terms of the business combination
The shareholders of Samsung Gwangju Electronics. received 0.0252536 shares of the Company’s common stock for each share of
Samsung Gwangju Electronics common stock owned on the closing date. The Company transferred its treasury stocks to the shareholders
of Samsung Gwangju Electronics, instead of issuing new stocks.
2) Acquisition of Medison and Prosonic
The Company entered into contracts to acquire 43.5% of Medison’s shares and 100% of Prosonic’s shares, of KRW 331,384 million, on
February 16, 2011 with approval of the Board of Directors on December 14, 2010.
Name of the acquired company Samsung Gwangju Electronics
Headquarters location Gwangju, Gwangsan-gu
Representative director Chang-wan Hong
Classification of the acquired company Unlisted company
Former relationship with the Company Subsidiary