3 – Changes in group structure
A full list of OMV investments as well as changes in consolidated group can be found in Note 38 – Direct and indirect investments of OMV Aktiengesellschaft. Major changes in consolidated Group are described below.
Changes in consolidated Group – Downstream
On October 29, 2020, OMV acquired an additional 39% share in Borealis AG from Mubadala Investment Company (Abu Dhabi) via the acquisition of 100% shares in Susana Beteiligungsverwaltungs GmbH, increasing its stake in Borealis Group from 36% to 75%. The purchase price of the transaction amounted to USD 4,551 mn after customary closing adjustments were taken into account.
The acquisition is a strategic extension of OMV´s value chain into high value chemicals. This contributes to a partial natural hedge against the cyclicality of each value chain step with respect to both volumes and market spreads, de-risking OMV’s exposure to volatile markets.
Following the step acquisition, OMV obtained the right to nominate the majority of the executive board members and the most important activities in respect of impacting the variable returns of Borealis Group are decided by OMV. Hence, OMV has obtained control over Borealis Group in line with IFRS 10.
Obtaining control over Borealis Group has led to the discontinuation of the use of the equity method according to IAS 28 and application of the rules for business combination according to IFRS 3. OMV´s previous 36% interest in Borealis was re-measured at the acquisition date fair value resulting in EUR 1,256 mn gain recognized in other operating income. Additionally, this led to a reclassification of net gains from other comprehensive income to other operating income in amount of EUR 28 mn, which were mainly related to currency translation differences.
Acquired net assets and goodwill calculation
The non-controlling interest in Borealis Group was measured at its proportionate share of the acquiree’s identifiable net assets. The transaction did not result in a goodwill. The fair value of the receivables substantially matched their carrying amount, and all contractual cash flows less credit loss effects are expected to be collected. The fair value of the net assets acquired are detailed in the following tables.
In EUR mn |
|
|
Borealis Group |
|---|---|
Intangible assets |
887 |
Property, plant and equipment |
4,129 |
Equity-accounted investments |
6,134 |
Other financial assets |
743 |
Other assets |
45 |
Deferred taxes |
39 |
Non-current assets |
11,977 |
Inventories |
1,123 |
Trade receivables |
684 |
Other financial assets |
132 |
Income tax receivable |
13 |
Other assets |
310 |
Cash and cash equivalents |
80 |
Current assets |
2,341 |
Total assets |
14,318 |
Provisions for pensions and similar obligations |
457 |
Bonds |
324 |
Lease liabilities |
139 |
Other interest-bearing debts |
1,131 |
Decommissioning and restoration obligations |
38 |
Other provisions |
12 |
Other financial liabilities |
32 |
Other liabilities |
2 |
Deferred taxes |
549 |
Non-current liabilities |
2,683 |
Trade payables |
719 |
Bonds |
5 |
Lease liabilities |
34 |
Other interest-bearing debts |
407 |
Income tax liabilities |
62 |
Other provisions |
27 |
Other financial liabilities |
154 |
Other liabilities |
163 |
Current liabilities |
1,571 |
Total liabilities |
4,254 |
Net assets |
10,064 |
Non-Controlling interests |
(2,524) |
Net assets acquired |
7,540 |
In EUR mn |
|
|
Borealis Group |
|---|---|
Fair value |
3,590 |
Carrying amount |
2,333 |
Revaluation result |
1,256 |
Amount reclassified from OCI to the income statement (“recycled”) |
28 |
Total impact – other operating income |
1,284 |
In EUR mn |
|
|
Borealis Group |
|---|---|
Consideration |
3,889 |
FX hedge effect |
61 |
Fair value of previously held at-equity share |
3,590 |
Net assets acquired |
7,540 |
Goodwill |
0 |
In 2020, Borealis Group contributed EUR 1,099 mn to consolidated sales and EUR (79) mn to consolidated net income of OMV Group since its inclusion. In 2020 Borealis net income was mainly impacted by reversal effects from fair value adjustments for inventories from the purchase price allocation. If the acquisition had already taken place at the beginning of the year, the calculated impact of Borealis Group to the OMV Group would have been EUR 5,866 mn on consolidated sales revenues, EUR 6,801 mn on unconsolidated sales revenues and EUR 302 mn on net income, respectively.
Cash flow impact of major acquisitions
The cash flow from investing activities contained EUR 3,870 mn cash outflow related to the acquisition of Borealis Group, reflected in the line “Acquisition of subsidiaries and businesses net of cash acquired” as detailed in the below table
In EUR mn |
|
|
Borealis Group |
|---|---|
Consideration paid |
3,950 |
less cash acquired |
(80) |
Net cash outflows from acquisition |
3,870 |
Income tax impact of major acquisitions
Due to tax synergies from the acquisition of additional shares in Borealis AG, deferred tax assets of the Austrian tax group increased by approximately EUR 500 mn, taking into consideration the 5 year positive taxable result of Borealis tax group members.