Canon 2015 Annual Report Download - page 63

CANON ANNUAL REPORT 2015 61
STRATEGY BUSINESS SEGMENT CORPORATE STRUCTURE FINANCIAL SECTION CORPORATE DATA
Millions of yen
Current assets ¥ 31,365
Intangible assets 60,992
Goodwill 259,863
Other noncurrent assets 2,053
Non-current assets 322,908
Total assets acquired 354,273
Total liabilities assumed 32,462
Net assets acquired ¥ 321,811
7. ACQUISITIONS
On April 15, 2015, the Company acquired 76.1% of the
issued shares of Axis AB (“Axis”), a Sweden-based company
listed on Nasdaq Stockholm, a global leader in the network
video solution industry, primarily through a public cash ten-
der offer for consideration of ¥244,725 million. In addition,
the Company acquired 9.0% of the issued shares of Axis from
noncontrolling shareholders primarily through an additional
public cash tender offer. As a result, the Company’s aggregate
interest represents 85.1% of the issued shares of Axis. The fair
value of the 23.9% noncontrolling interest in Axis of ¥77,086
million was measured based on Axis’s common stock price on
the acquisition date.
The acquisition was accounted for using the acquisi-
tion method of accounting. Acquisition-related costs were
expensed as incurred and were not material.
The Company views its network surveillance camera busi-
ness as a promising new business area for Canon. Canon aims
to provide advanced and high-performance network solu-
tions to its customers and improve its product competitiveness
through the acquisition.
Intangible assets acquired, which are subject to amortization,
consist of trademarks of ¥42,880 million, patents and developed
technology of ¥17,823 million and software of ¥289 million.
Canon has estimated the amortization period for the trademarks,
patents and developed technology, and software to be 15 years,
7 years and 5 years, respectively. The weighted average amortiza-
tion period for all intangible assets is approximately 13 years.
Goodwill recorded is attributable primarily to expected syner-
gies from combining operations of Axis and Canon. None of the
goodwill is expected to be deductible for tax purposes. The good-
will is assigned primarily to the Industry and Others Business Unit
for impairment testing.
The amounts of net sales of Axis since the acquisition date
included in the Canon’s consolidated statement of income for
the year ended December 31, 2015 were ¥72,602 million. The
amounts of net income of Axis included in the Canon’s consoli-
dated statement of income were not material.
Pro forma results of operations were not disclosed because
the effect on the Canon’s consolidated statement of income
was not material.
Canon acquired businesses other than that described above
during the year ended December 31, 2015 that were not mate-
rial to its consolidated financial statements.
During the year ended December 31, 2014, Canon acquired
several companies for a total cash consideration of ¥70,671
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at acquisition date.
million, of which ¥30,696 million, ¥8,789 million, and ¥4,633
million was attributed to intangible assets, the related deferred
tax liabilities, and other net assets acquired, respectively, and the
residual amount of ¥44,131 million was recorded as goodwill.
The goodwill recorded is attributable primarily to expected syn-
ergies from the combined operations of the acquired companies
and Canon. None of the goodwill is expected to be deductible
for tax purposes. Total acquisition-related costs were expensed as
incurred and were not significant.
Intangible assets acquired, which are subject to amortization,
consist of software of ¥13,290 million, customer relationships
of ¥1,628 million and other intangible assets of ¥3,841 million.
Canon has estimated the weighted average amortization period
for the software and customer relationships to be 7 years and
6 years, respectively. The weighted average amortization period
for all intangible assets is approximately 9 years. Intangible assets
acquired, which are not subject to amortization, consist of in-
process research and development of ¥11,937 million.
The results of operations of the acquired companies were
included in Canon’s consolidated financial statements from the
respective acquisition dates and were not material. Pro forma
results of operations have not been disclosed because the
effects of these acquisitions were not material, individually and
in the aggregate.