Unilever 2013 Annual Report Download - page 134

20 OMMITMENTS AND ONTINENT LIABILITIES CONTINUED
LEAL PROEEDINS
The Group is involved from time to time in legal and arbitration proceedings arising in the ordinary course of business.
As previously disclosed, along with other consumer products companies and retail customers, Unilever is involved in a number of
ongoing investigations by national competition authorities. These proceedings and investigations are at various stages and concern a
variety of product markets. In the second half of 2013 Unilever recognised provisions of €120 million related to these cases.
Ongoing compliance with competition laws is of key importance to Unilever. It is Unilever’s policy to co-operate fully with competition
authorities whenever questions or issues arise. In addition, the Group continues to reinforce and enhance our internal competition law
compliance programme on an ongoing basis. As disclosed above, where specific issues arise provisions are made and contingent
liabilities disclosed to the extent appropriate.
During 2004 in Brazil, and in common with many other businesses operating in that country, one of our Brazilian subsidiaries received a
notice of infringement from the Federal Revenue Service. The notice alleges that a 2001 reorganisation of our local corporate structure
was undertaken without valid business purpose. The 2001 reorganisation was comparable with restructurings done by many companies
in Brazil. The original dispute has now been resolved in the courts in the Group’s favour but a new assessment was raised during the
course of the year in respect of a similar matter. The Group believes that the likelihood of a successful challenge by the tax authorities is
low, however, there can be no guarantee of success in court.
In many markets, there is a high degree of complexity involved in the local tax regimes. In common with other businesses operating in this
environment, the Unilever Group is required to exercise judgement in the assessment of any potential exposures in these areas. Where
appropriate, the Unilever Group will make provisions or disclose contingencies in accordance with the relevant accounting principles.
21 AQUISITIONS 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 have
any impact on goodwill. The difference between consideration and the non-controlling share of net assets acquired is recognised
within equity.
2013
On 3 January 2013 the Group announced that it has signed a definitive agreement to sell its global Skippy business to Hormel Foods for
a total cash consideration of approximately US $700 million. The transaction completed on 31 January 2013, excluding the portion
operated out of China, which completed on 26 November 2013.
On 8 April 2013 Unilever signed an agreement to acquire the SAVO and other consumer brands from Bochemie. This completed on 1
July 2013.
On 26 July 2013 Unilever signed an agreement to sell its Unipro bakery & industrial oils business to AAK for an undisclosed sum. This
completed on 2 September 2013.
On 6 September 2013 Unilever announced that it has entered into a definitive agreement to acquire T2, a premium Australian tea
business, for an undisclosed amount. This completed on 3 October 2013.
On 1 October 2013 the Group completed the sale of its Wish-Bone and Western dressings brands to Pinnacle Foods Inc. for a total cash
consideration of approximately US $580 million.
On 19 November 2013 Unilever signed an agreement for the sale of its Soft & Beautiful, TCB and Pro-Line Comb-Thru brands to
Strength of Nature for an undisclosed amount. The sale excludes TCB’s business in Africa.
131Unlever Annual Report and Accounts 2013 Fnancal statements