Fully consolidated subsidiaries

After receiving the key antitrust approvals, on July 22, 2008 Volkswagen completed the acquisition of all the shares of Scania AB, Södertälje, Sweden, that were previously held by Investor AB and the Wallenberg foundations. As a result, Volkswagen’s share of the voting rights increased by a further 30.62% from 37.98% to 68.60%. Volkswagen’s equity interest also rose by 16.84% from 20.89% to 37.73%. Together with 167 subsidiaries, Scania AB has been included in Volkswagen’s consolidated financial statements since that date. Further information on Scania can also be found in the chapter entitled “Scania”.

The cost of the business combination that was paid in cash amounted to €2,756 million, including all costs directly attributable to the acquisition. The precise allocation of the purchase price to the assets acquired and liabilities assumed requires detailed examination in view of the size of Scania and is therefore preliminary at present.

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IFRS carrying amounts at the acquisition date

 

Purchase price allocation (preliminary)

 

Fair values
at the
acquisition date (preliminary)

€ million

 

 

 

 

 

 

1

Excluding goodwill of Volkswagen AG.

2

Including deferred taxes.

Total assets

 

10,282

 

3,739

 

14,021

Customer relationships

 

 

374

 

374

Brand name

 

 

1,027

 

1,027

Intangible assets1

 

245

 

1,179

 

1,424

Property, plant and equipment

 

2,027

 

688

 

2,715

Leasing and rental assets

 

1,085

 

127

 

1,212

Inventories

 

1,482

 

380

 

1,862

Cash

 

206

 

 

206

Other assets

 

5,237

 

–36

 

5,201

 

 

 

 

 

 

 

Total liabilities

 

8,096

 

1,062

 

9,158

Pension provisions

 

428

 

 

428

Other noncurrent provisions

 

110

 

 

110

Current provisions

 

224

 

 

224

 

 

 

 

 

 

 

Noncurrent liabilities2

 

2,729

 

1,062

 

3,791

Current liabilities

 

4,605

 

 

4,605

 

 

 

 

 

 

 

Equity1

 

2,186

 

2,677

 

4,863

Equity attributable to shareholders of Volkswagen AG1

 

825

 

1,010

 

1,835

Minority interests

 

1,361

 

1,667

 

3,028

The preliminary goodwill identified at a carrying amount of €2,952 million (translated at the closing rate at the acquisition date) includes non-separable amounts, such as employee knowledge and synergy effects in technology and purchasing.

Goodwill was calculated separately for the individual tranches acquired. The hidden reserves and liabilities relating to the legacy shares acquired in 2000 cannot be measured reliably in accordance with the current version of IFRS 3. As a result, the originally calculated goodwill for these shares was used on the basis of impairment already recognized.

More recent findings as of the balance sheet date have led to the reduction of the fair values of the assets by €341 million (primarily intangible assets) compared with the figures disclosed in the interim financial statements for the third quarter of 2008. At the same time, adjustments to the fair values of liabilities led to a reduction of €149 million. Preliminary goodwill fell from €3,084 million to €2,952 million due to the effects of the change in purchase price allocation and the treatment of the legacy tranche described above.

Excluding the effects of purchase price allocation, Scania contributed sales revenue of €3,865 million and a proportionate profit after tax of €288 million to the Volkswagen Group’s figures. The adjustment of the purchase price allocation figures leads to a loss after tax of €398 million. This is primarily due to expenses of €524 million associated with the settlement of current assets such as finished goods and orders. The average useful life of finite-lived noncurrent assets is 5 to 20 years. If Scania had been included in the consolidated financial statements as of January 1, 2008, sales revenue and profit after tax would have amounted to €9,560 million and €925 million respectively, excluding the effects of purchase price allocation.

As well as the addition of the Scania Group to the consolidated Group, in 2008 two companies that were not consolidated in the previous year and two newly formed companies in Germany were initially consolidated, as were one unconsolidated and seven newly formed foreign companies. The initial inclusion of these subsidiaries, either individually or collectively, did not have a significant effect on the presentation of the Company’s situation. The number of consolidated subsidiaries was also reduced by the merger of eleven and the sale of two foreign companies.

Volkswagen acquired a further 3.63% interest in the capital of Scania by the balance sheet date.

In addition, Volkswagen acquired 0.41% of the shares of AUDI AG, Ingolstadt, from Porsche Automobil Holding SE, Stuttgart. Porsche Automobil Holding SE had previously acquired the shares as part of a mandatory bid to the shareholders of AUDI AG published on September 29, 2008.

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