237
Annual Report -
2013
-
Vivendi
4
Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
Consolidated
Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 2. Major changes in the scope of consolidation
2.3.
Completion of the acquisition of EMI Recorded Music by Vivendi and Universal Music Group (UMG)
As a reminder, on September 28, 2012 Vivendi and UMG completed
the acquisition of 100% of the recorded music business of EMI Group
Global Limited (EMI Recorded Music). EMI Recorded Music has been
fully consolidated since that date. The purchase price, in enterprise
value, amounted to £1,130 million (€1,404 million). The authorization by
the European Commission was notably conditional upon the divestment
of the Parlophone, Now, and Mute labels. In accordance with IFRS 5,
Vivendi reported these assets as assets held for sale at market value
(less costs to sell), in the Statements of Financial Position, until
completion of the sale.
On February 7, 2013, Vivendi and UMG announced that they had entered
into an agreement for the sale of Parlophone Label Group to Warner
Music Group for an enterprise value of £487 million to be paid in cash.
Following the approval by the European Commission on May 15, 2013,
the sale of Parlophone Label Group was completed on July 1, 2013 and
Vivendi received a consideration of £501 million (€591 million), including
the provisional estimated contractual price adjustments (£14 million).
Moreover, the divestments of Sanctuary, Now, and Mute were
completed.
The aggregate amount of divestments made in compliance with the
conditions imposed by the regulatory authorities in connection with the
acquisition of EMI Recorded Music was £543 million, less costs to sell
(approximately €679 million, including €39 million in gains on foreign
exchange hedging and a consideration in the amount of €19 million
remaining payable as of December 31, 2013).
Finalization of the purchase price allocation
UMG finalized the purchase price allocation of EMI Recorded Music
within a 12-month period as required by accounting standards: the
purchase price, using the fair value of assets acquired and liabilities
incurred or assumed, was based on analyses and appraisals prepared
by UMG with the assistance of third-party appraisers, when appropriate.
The major acquired assets were the music catalogs, amortized over
a period of 15 years and artist contracts, amortized over a period of
10 years.
In 2013, goodwill was adjusted by €57 million and the final goodwill amount of EMI Recorded Music amounted to €358 million, following the
finalization of the purchase price allocation as presented below:
(in millions of euros)
September 28, 2012
Carrying value of EMI Recorded Music’s assets and liabilities acquired by Vivendi
(A)
(333)
Fair value adjustments of EMI Recorded Music’s acquired assets and liabilities incurred or assumed:
Music rights and catalog
1,046
Deferred income tax, net
(321)
Other
(18)
Total
(B)
707
Fair value of EMI Recorded Music’s acquired assets and liabilities incurred or assumed
(C=A+B)
374
Fair value of EMI Recorded Music’s assets and liabilities sold
672
Goodwill
358
Purchase price of 100% of EMI Recorded Music
1,404
