Unilever 2011 Annual Report Download - page 107

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104
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS UNILEVER GROUP continued
21. Acquisitions and disposals
Business combinations are accounted for using the acquisition accounting method as at the acquisition date, which is the date at
which control is transferred to the Group.
Goodwill is measured at the acquisition date as the fair value of consideration transferred, plus non-controlling interests and the
fair value of any previously held equity interests less the net recognised amount (which is generally fair value) of the identifiable
assets and liabilities assumed. Consideration transferred does not include amounts related to settlement of pre-existing
relationships. Such amounts are generally recognised in net profit.
Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of
contingent consideration are recognised in net profit.
Changes in ownership that do not result in a change of control are accounted for as equity transactions and therefore do not impact
goodwill. The difference between consideration and the non-controlling share of net assets acquired is recognised within equity.
Alberto Culver
On 10 May 2011 the Group completed the purchase of 100% of Alberto Culver. This acquisition added brands to Unilever’s existing
portfolio including TRESemmé, Nexxus, St. Ives and Noxzema in the United States and internationally.
The consideration was €2,689 million in cash. The provisional fair value of assets and liabilities recognised for the acquisition is €1,339million.
The intangible assets of Alberto Culver are principally brands. Their fair values have been provisionally determined pending the completion of
valuations in 2012. The provisional estimate of the goodwill arising on the acquisition of Alberto Culver is €1,350 million. It relates to the value
of the anticipated synergies to be realised from the acquisition, together with the market position and the assembled workforce.
€ million
Provisional
fair
values
€ million
Further
adjustments
€ million
Revised
fair
values
Intangible assets 1,332 132 1,464
Property, plant and equipment 115 (6) 109
Other non-current assets 41 – 41
Deferred tax assets 2 – 2
Total non-current assets 1,490 126 1,616
Inventories 126 – 126
Trade and other current receivables 157 – 157
Current tax assets 28 – 28
Cash and cash equivalents 357 – 357
Other financial assets 32 – 32
Non-current assets held for sale 41 (13) 28
Total current assets 741 (13) 728
Financial liabilities (3) – (3)
Trade payables and other current liabilities (268) (2) (270)
Current tax liabilities (2) – (2)
Liabilities associated with assets held for sale (12) 12 –
Total current liabilities (285) 10 (275)
Deferred tax liabilities (536) (37) (573)
Other non-current liabilities (152) 4 (148)
Pensions and post-retirement healthcare liabilities (4) (5) (9)
Total non-current liabilities (692) (38) (730)
Total identifiable net assets 1,254 85 1,339
Consideration – cash 2,689 – 2,689
Goodwill on acquisition 1,435 (85) 1,350
Total acquisition-related costs incurred to date for Alberto Culver are €30 million of which €10 million have been recorded in the
income statement for the year ended 31 December 2011. These acquisition costs are included in administrative expenses and presented
within acquisition and integration costs (note 3).
Since acquisition, Alberto Culver has contributed €663 million to Group turnover and €4 million to Group operating profit, net of
€88million of one-off costs which were recorded within acquisition and integration costs (note 3). If the acquisition had taken place
Unilever Annual Report and Accounts 2011
Financial statements