Aviva 2009 Annual Report Download - page 154

152
Aviva plc Notes to the consolidated financial statements continued
Annual Report and Accounts 2009
3 – Subsidiaries
This note provides details of the acquisitions and disposals of subsidiaries that the Group has made during the year, together with
details of businesses held for sale at the year end. The principal Group subsidiaries are listed on pages 33 to 34.
(a) Acquisitions
(i) Material acquisitions
There were no material acquisitions in the year ended 31 December 2009.
(ii) Other goodwill arising
As disclosed in the 2008 financial statements, on 30 June 2008 the Group acquired Swiss Life Belgium (SLB). At 30 June 2009,
the fair values of the assets and liabilities were updated from their provisional values to reflect decreases in the value of acquired
in-force business and deferred acquisition costs, and increases in insurance and investment contract liabilities. This has given rise
to an increase in goodwill of €72 million (£64 million) to €132 million (£117 million).
Other goodwill of £5 million has arisen on smaller acquisitions and increases in shareholdings in existing subsidiaries, together
with a £16 million reduction for changes in contingent consideration payable on previous acquisitions. None of these is considered
material for separate disclosure.
(iii) Non-adjusting subsequent event
Acquisition of River Road Asset Management
On 5 January 2010, the Group announced that it had agreed to acquire 100% of River Road Asset Management, a US equity
manager, to support the expansion of Aviva Investors’ third party institutional asset management business. Completion took place
on 24 February 2010 for an estimated total consideration of £79 million (US$122 million), of which £37 million (US$57 million)
was paid in cash on completion. The balance comprises contingent consideration.
The contingent consideration arrangement requires the Group to pay amounts over the next five years, based on a multiple of
the earnings during that period, up to a maximum total purchase price of £70 million (US$108 million). The potential undiscounted
amount of all future payments that the Group could be required to make under the contingent consideration arrangement is
between £26 million (US$41 million) and £53 million (US$82 million).
In view of the recent timing of this transaction, accounting for this acquisition is not yet complete and it is currently impractical
to comply with the requirements of IFRS 3,
Business Combinations and to state with any certainty the fair values of the assets and
liabilities acquired, and therefore to estimate the goodwill arising on the transaction.
(b) Disposal of subsidiaries, joint ventures and associates
The profit on the disposal of subsidiaries, joint ventures and associates comprises:
2009 2008
£m £m
United Kingdom — (38)
Netherlands (see (i) below) 31 —
Australia (see (ii) below) 122 —
Offshore operations — 14
Other small operations — 31
Profit on disposal before tax 153 7
Tax on profit on disposal — —
Profit on disposal after tax 153 7