Acquisitions affect the comparison with last year’s figures, and the changes in the various notes must be seen in the light of this. Acquired companies are presented in the financial statements from the date on which control transfers to the Group, and for most of the acquisitions figures are indicated for profit or loss before and after the date of acquisition. The date of control is normally the date on which the contract takes effect and all official approvals have been obtained. The date of control will normally be after the contract date.
In 2011, Orkla Brands acquired the businesses Rasoi Magic Foods (India), Dagens (Norway), Henskjold Agenturforretning (Norway) and Iglo Logistikksenter (Norway).
Rasoi Magic Foods, which is located in Pune, Western India, is an Indian manufacturer of spices and spice mixes. Under the agreement, Orkla Brands acquired 100% of the shares through its Indian company, MTR Foods. The company has around 60 employees. This acquisition is part of Orkla Brands International’s further investment in India, which Orkla Brands considers to be an attractive and growing market. Rasoi Magic Foods complements the products of the Indian branded company, MTR Foods.
Stabburet AS bought 100% of the shares in Dagens AS, which owns a factory for the small-scale production of pizza. Dagens is currently one of Stabburet’s suppliers as manufacturer of the pizza brand Chicago, which is sold as fast food by convenience stores and petrol stations. This agreement will give Stabburet even better possibilities of developing good varieties of pizza for market segments in which Stabburet is not currently represented. Dagens has 22 employees.
Orkla Food Ingredients acquired a majority share of Henskjold Agenturforretning on 1 January, and the company Iglo Logistikksenter was acquired in the fourth quarter. Henskjold has 11 employees. In connection with the acquisition, NOK 4 million was taken to income as an upward adjustment of the prior ownership interest, se Note 14. Iglo is a freezing plant in Gardermoen, Norway, and has 10 employees. Idun has expanded its frozen bakery goods operations in the past few years. The acquisition of Iglo Logistikksenter ensures good operatingpparameters for the further growth of Idun’s My Bakery concept. These two acquisitions are aggregated in the table on the next page as the individual acquisitions are not of material size.
The excess values are largely related to goodwill and tangible assets. Goodwill from the acquisitions in Orkla Brands is based on factors such as synergies and expertise and thus the possibility of developing new products in the future. The goodwill is not tax deductible. NOK 36 million was expensed in acquisition costs in Orkla Brands in 2011.
In 2011, Sapa Profiles mainly invested in businesses located in India and China.
Sapa Profiles India Pvt Ltd took over the assets related to Alufit’s aluminium extrusion operations in Kuppam, near Bangalore in Southern India, in 2011. The plant, which was built in 2009, is an integrated one-press extrusion facility with both powder coating and anodising capabilities. The plant currently has an annual capacity of 9,000 tonnes. The acquisition was made to increase Sapa’s presence in India and Asia. Upon completion of the transaction, Sapa will be the first global aluminium company with local extrusion facilities in India.
At the end of September, Sapa signed an agreement with Jiangyin Haihong Non-Ferrous Materials Co., Ltd. (Haihong) to acquire the assets and operations of Haihong’s aluminium profile facility in Jiangyin, located 150 km northeast of Shanghai. The facility comprises 15 presses with a total capacity of 60,000 tonnes, and is one of the largest extrusion plants in the Yangtze River Delta region. The facility is also equipped with casting, anodising, horizontal powder coating, thermal break and fabrication capabilities. In 2010, the company had 550 employees and a production volume of over 20,000 tonnes. The acquisition was completed at the end of December 2011.
Both acquisitions are direct purchases of assets and liabilities. Excess value is primarily related to goodwill in Alufit, and represents the value of being able to establish operations rapidly in the market, thereby deriving profit at an early stage. The goodwill is not tax deductible.
A total of NOK 55 million in acquisition costs were expensed in Sapa in 2011.
Orkla Financial Investments
In connection with certain partly owned companies under Orkla Financial Investments, the shareholder agreement provided for option rights that might have resulted in Orkla being obliged to buy all or parts of its co-owners’ interests in the companies. In 2010 Orkla Eiendom, Orkla’s real estate development section, received notification from Coop Eiendom AS regarding the exercise of a put option relating to 33.33% of the shares in Finansgruppen Eiendom AS. At 31 December 2010, Orkla Eiendom held a 33.33% stake in Finansgruppen Eiendom AS. The option was exercised in the first quarter of 2011. At that time, the company was still a joint venture within the Orkla Group, and was proportionately consolidated into Orkla’s financial statements on a 66.67%, rather than a 33.33%, basis. At the start of the third quarter 2011, Orkla Financial Investments acquired the remaining 33.33% of Finansgruppen Eiendom AS. The company has therefore been treated as a subsidiary as from the third quarter.
The excess value in this acquisition mainly relates to property, plant and equipment and associates. A total of NOK 10 million was expensed in connection with the acquisition as a downward adjustment of the former ownership interest (see Note 14).
Other matters relating to excess value analyses
No provision has been made for losses related to receivables in the acquired companies, and the receivables have therefore been recorded at their nominal value. There are no material contingent considerations or contingent liabilities related to the acquisitions.
The fair value of the non-controlling ownership interests was estimated on the basis ofmarket value.
A total of NOK 124 million was expensed in M&A costs in 2011 (see Note 14).