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112 Vodafone Group Plc Annual Report 2006
Notes to the Consolidated Financial Statements
continued
28. Acquisitions continued
India – Bharti Airtel Limited
On 18 November 2005, the Group acquired a 5.61% direct interest in Bharti Airtel Limited (previously Bharti Tele-Ventures Limited) from Warburg Pincus LLC, and on 22 December
2005 the Group acquired a further 4.39% indirect interest in Bharti Airtel Limited, bringing the Group’s effective shareholding to 10.0%.
Total cash consideration was Rs.67 billion (£858 million).
Book Fair value Fair
value adjustments value
£m £m £m
Net assets acquired:
Intangible assets 49 345 394(1)
Property, plant and equipment 142 (1) 141
Inventory 1–1
Trade and other receivables 30 – 30
Cash and cash equivalents 9–9
Deferred tax liabilities (2) (126) (128)
Short and long-term borrowings (56) – (56)
Current tax liabilities – (2) (2)
Trade and other payables (73) (1) (74)
100 215 315
Goodwill 543
Total cash consideration (including £1 million of directly attributable costs) 858
Net cash outflow arising on acquisition:
Cash consideration 858
Cash and cash equivalents acquired (9)
849
Note:
(1) Intangible assets consist of licences and spectrum fees of £343 million and other intangibles of £51 million.
The goodwill is attributable to the profitability of the acquired business and the synergies expected to arise within those businesses after the Group's acquisition of the shares in
Bharti Airtel Limited.
Results of the acquired entity have been proportionately consolidated in the income statement from the dates of acquisition.
From the date of acquisition, the entity contributed a loss of £8 million to the net loss of the Group.