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3. BUSINESS COMBINATIONS AND DISPOSITIONS
EMA ACQUISITION
ÌýÌýÌýÌýÌýÌýÌýÌýOn DecemberÌý30, 2011, we completed the acquisition of EMA Kimya Sistemleri Sanayi ve Ticaret A.S. (the "EMA Acquisition"), an MDI-based polyurethanes systems house in Istanbul, Turkey for approximately $11Ìýmillion, net of cash acquired and including the repayment of assumed debt. We have accounted for the EMA Acquisition using the acquisition method and transaction costs charged to expense associated with this acquisition were not significant. For purposes of a preliminary allocation of the acquisition cost to assets acquired and liabilities assumed, we have assigned the excess of the acquisition cost over historical carrying values of $7Ìýmillion to goodwill. This preliminary purchase price allocation is likely to change once we analyze the fair value of tangible and intangible assets acquired and liabilities assumed. Net sales for the years ended DecemberÌý31, 2011 and 2010 related to the business acquired were approximately $23Ìýmillion and $17Ìýmillion, respectively, and net loss associated with this business was $3Ìýmillion and nil, respectively, for the same periods.
SALE OF STEREOLITHOGRAPHY RESIN AND DIGITALIS® MACHINE MANUFACTURING BUSINESSES
ÌýÌýÌýÌýÌýÌýÌýÌýOn NovemberÌý1, 2011, our Advanced Materials division completed the sale of its stereolithography resin and Digitalis® machine manufacturing businesses to 3D Systems Corporation for $41Ìýmillion in cash. The stereolithography business had revenues of approximately $7Ìýmillion in 2010 and its products are used primarily in three-dimensional part building systems. The Digitalis® business is a stereolithography rapid manufacturing system previously under development by ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾. In connection with this sale, we recognized a pre-tax gain in the fourth quarter of 2011 of $34Ìýmillion which was reflected in other operating income on the accompanying consolidated statements of operations and comprehensive income (loss). We also derecognized $2Ìýmillion of goodwill that was allocated to these businesses.
LAFFANS ACQUISITION
ÌýÌýÌýÌýÌýÌýÌýÌýOn AprilÌý2, 2011, we completed the acquisition of the chemical business of Laffans Petrochemicals Limited, an amines and surfactants manufacturer located in Ankleshwar, India at an acquisition cost of approximately $23Ìýmillion. The acquired business has been integrated into our Performance Products segment. Transaction costs charged to expense related to this acquisition were not significant.
ÌýÌýÌýÌýÌýÌýÌýÌýWe have accounted for the Laffans Acquisition using the acquisition method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed. The preliminary allocation of acquisition cost to the assets acquired and liabilities assumed is summarized as follows (dollars in millions):
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|
|
|
|
|
Acquisition cost
|
Ìý |
$ |
23 |
Ìý |
| Ìý |
Ìý |
Ìý |
Ìý |
|
Fair value of assets acquired and liabilities assumed:
|
Ìý |
Ìý |
Ìý |
Ìý |
|
Accounts receivable
|
Ìý |
$ |
10 |
Ìý |
|
Inventories
|
Ìý |
Ìý |
2 |
Ìý |
|
Other current assets
|
Ìý |
Ìý |
2 |
Ìý |
|
Property, plant and equipment
|
Ìý |
Ìý |
14 |
Ìý |
|
Accounts payable
|
Ìý |
Ìý |
(3 |
) |
|
Accrued liabilities
|
Ìý |
Ìý |
(1 |
) |
|
Other noncurrent liabilities
|
Ìý |
Ìý |
(1 |
) |
| Ìý |
Ìý |
Ìý |
Ìý |
|
Total fair value of net assets acquired
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Ìý |
$ |
23 |
Ìý |
| Ìý |
Ìý |
Ìý |
Ìý |
ÌýÌýÌýÌýÌýÌýÌýÌýThe acquisition cost allocation is preliminary pending final determination of the fair value of assets acquired and liabilities assumed, including final valuation of property, plant and equipment, intangible assets and the determination of related deferred taxes. For purposes of this preliminary allocation of fair value, we have assigned any excess of the acquisition cost over historical carrying values to property, plant and equipment and no amounts have been allocated to goodwill. It is possible that changes to this allocation could occur.
ÌýÌýÌýÌýÌýÌýÌýÌýIf this acquisition were to have occurred on JanuaryÌý1, 2010 the following estimated pro forma revenues and net income attributable to ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation and ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International would have been reported (dollars in millions):
ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation
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|
|
|
|
|
|
Ìý
|
Ìý |
Pro Forma |
Ìý |
Ìý
|
Ìý |
Year ended
(unaudited) |
Ìý |
Ìý
|
Ìý |
2011 |
Ìý |
2010 |
Ìý |
|
Revenues
|
Ìý |
$ |
11,235 |
Ìý |
$ |
9,301 |
Ìý |
|
Net income attributable to ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation
|
Ìý |
Ìý |
248 |
Ìý |
Ìý |
28 |
Ìý |
ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International
|
|
|
|
|
|
|
|
Ìý
|
Ìý |
Pro Forma |
Ìý |
Ìý
|
Ìý |
Year ended
(unaudited) |
Ìý |
Ìý
|
Ìý |
2011 |
Ìý |
2010 |
Ìý |
|
Revenues
|
Ìý |
$ |
11,235 |
Ìý |
$ |
9,301 |
Ìý |
|
Net income attributable to ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International
|
Ìý |
Ìý |
254 |
Ìý |
Ìý |
181 |
Ìý |
TEXTILE EFFECTS ACQUISITION
ÌýÌýÌýÌýÌýÌýÌýÌýOn JuneÌý30, 2006, we acquired Ciba's textile effects business and accounted for the Textile Effects Acquisition using the purchase method. As such, we analyzed the fair value of tangible and intangible assets acquired and liabilities assumed and we determined the excess of fair value of net assets over cost. Because the fair value of the acquired assets and liabilities assumed exceeded the purchase price, the valuation of the long-lived assets acquired was reduced to zero. Accordingly, no basis was assigned to property, plant and equipment or any other non-current nonfinancial assets and the remaining excess was recorded as an extraordinary gain, net of taxes (which were not applicable because the gain was recorded in purchase accounting). During 2011, 2010 and 2009, we recorded an additional extraordinary gain (loss) on the acquisition of $4Ìýmillion, $(1) million and $6Ìýmillion, respectively, related to settlement of contingent purchase price consideration, the reversal of accruals for certain restructuring and employee termination costs recorded in connection with the Textile Effects Acquisition and a reimbursement by Ciba of certain costs pursuant to the acquisition agreements.
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