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27 Business combination


The Group acquired 100% of the shares of Visy Cartons Pty Ltd. (“Visy Cartons”) on a cash-free, debt-free basis on 29 November 2019. Visy Cartons provides carton packaging solutions for beverages in Australia and New Zealand, including SIG’s aseptic carton packaging solutions. It operates a sleeves manufacturing facility in Australia. The Group acquired Visy Cartons to gain full access to the beverage carton market in Australia and New Zealand, and to realise synergies from supply chain efficiencies and the use of the Group’s latest technologies and solutions. Visy Cartons was renamed to SIG Combibloc Australia Pty Ltd. in December 2019 and is part of the Group’s business in Asia Pacific.

Finalisation of the acquisition accounting in 2020

The following tables provide an overview of the consideration transferred, and the recognised amounts of assets acquired and liabilities assumed as of the acquisition date.

(In € million)



Cash paid on acquisition date



Completion account adjustments



Fair value of consideration



Intangible assets



Property, plant and equipment






Deferred tax liabilities



Other net liabilities acquired



Fair value of identifiable net assets acquired






The final consideration transferred totals €43.0 million. The Group paid €40.5 million (AUD 65.8 million) in cash on the acquisition date. Management had estimated that it would have an obligation to pay an additional €2.5 million upon the completion settlement and had therefore recognised a liability in the same amount as of 31 December 2019. The completion settlement was finalised in March 2020 and resulted in an additional consideration of €2.5 million. Consequently, there was no impact from the agreed additional payment on the amount of goodwill of €14.5 million initially recognised. The fair value of the identifiable net assets acquired was determined on a provisional basis as of 31 December 2019 but was deemed final in the second half of 2020. The goodwill arising on the acquisition thereby remains unchanged at €14.5 million.

Other information

The goodwill of €14.5 million mainly comprises expectations about expansion of the markets in Australia and New Zealand, introduction of new products in these markets and the skills and competence of the workforce. The goodwill has been allocated to the APAC segment for impairment testing purposes. The intangible assets acquired comprise customer relationships for which the useful lives are assessed to be ten years. The property, plant and equipment balance principally comprises plant and equipment, including filling lines leased to customers under contracts that qualify to be accounted for as operating leases.

The fair value of the customer relationships was assessed by applying the income approach, under which future net cash flows expected to accrue directly or indirectly to the investor are discounted to the present value. More specifically, the multi-period excess earnings method was used. Tax amortisation benefits were considered. Regarding property, plant and equipment, the fair values of production-related equipment and assets such as filling lines were estimated using a cost approach (depreciated replacement cost) while published market data was considered for other assets when possible. The fair value of inventories was estimated based on the estimated selling price in the ordinary course of business less the estimated cost of completion and sale, and reasonable profit margin.

For the one month ended 31 December 2019, Visy Cartons contributed revenue of €4.2 million and profit of €0.3 million to the Group’s results. If the acquisition had occurred on 1 January 2019, management estimates that consolidated revenue would have been €1,822.9 million and that consolidated profit for the year would have been €109.5 million. In determining these amounts, management has assumed that the fair value adjustments as of the date of acquisition would have been the same if the acquisition had occurred on 1 January 2019.

Accounting policy

Business combinations are accounted for using the acquisition method when the acquired set of activities and assets meets the definition of a business. Business combinations are accounted for at the acquisition date, which is when control is obtained. The consideration transferred is generally measured at fair value, as are the identifiable net assets acquired.

Goodwill is measured at the acquisition date as the fair value of the consideration transferred (including, if applicable, the fair value of any previously held equity interests and any non-controlling interests) less the net recognised amount (which is generally fair value) of the identifiable assets acquired and liabilities assumed. If the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If such a contingent consideration depends on the achievement of future earnings or other performance targets, any changes in the fair value are recognised in profit or loss.

Transaction costs, other than those associated with the issue of debt or equity securities incurred in connection with a business combination, are expensed as incurred.

Significant judgements and estimates

Significant judgements and estimates were made by management relating to the accounting for the acquisition of Visy Cartons. For example, the assessment of the fair values and the useful lives of the customer relationships involved significant judgement and estimates.