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Annual Report

Consolidated subsidiaries

On February 20, 2009, Volkswagen AG acquired from Porsche Automobil Holding SE, Stuttgart, the shares of Scania AB acquired by Porsche Automobil Holding SE under the terms of a mandatory bid procedure (2.34% of the voting rights and 7.93% of the share capital) at a price of €0.4 billion and thus increased its interest in Scania to 49.29% of the share capital and 71.81% of the voting rights. Any resulting difference was recognized in other comprehensive income.

Effective March 31, 2009, Volkswagen completed the transfer of all shares of Volkswagen Caminhões e Ônibus Indústria e Comércio de Veículos Comerciais Ltda., Resende, Brazil, to the MAN Group. Volkswagen Caminhões has therefore been deconsolidated. The disposal gain of €1,323 million increased the other operating result by approximately €556 million in the first quarter of 2009.

The following main groups of assets and liabilities were sold:

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€ million

 

2009*

*

Until deconsolidation.

Noncurrent assets

 

321

Current assets

 

633

of which: Cash and cash equivalents

 

12

Noncurrent liabilities

 

310

Current liabilities

 

370

Effective January 1, 2010, the Volkswagen Group acquired all shares of MAHAG GmbH (formerly: MAHAG Münchener Automobil-Handel Haberl GmbH & Co. KG), Munich, to safeguard the presence and sale of its brands, against the waiver of a claim in the amount of €9 million. The acquisition resulted in goodwill of approximately €8 million, which is attributable to the MAHAG Group.

To increase its design and development capacity, effective July 27, 2010 the Volkswagen Group acquired 90.1% of the voting rights of the design and development service provider Italdesign Giugiaro S.p.A., Turin, Italy (IDG), via Automobili Lamborghini Holding S.p.A., Sant’Agata Bolognese, Italy, a subsidiary of AUDI AG. The remaining shares of IDG were retained by the existing owners. The total purchase price of €180 million includes a put option measured at fair value that was granted to these shareholders on the outstanding shares. In connection with the acquisition, existing contractual relationships held by IDG were terminated in advance by mutual agreement subject to a mutual waiver of the assertion of claims for loss compensation or other claims. The value attributable to these relationships at IDG of €35 million was classified as a separate transaction and recognized as other operating expenses in fiscal year 2010.

The total purchase price is calculated as follows:

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€ million

 

2010

 Purchase price paid for 90.1% of the voting rights

 

194

+ Option on the outstanding voting rights

 

21

– Settlement for the termination of existing agreements

 

35

= Total purchase price

 

180

The merger resulted in goodwill of €72 million, which is attributable primarily to expected synergy effects in the Audi subgroup.

In the course of 2010, the Scania Group acquired dealership operations in France, Switzerland and Italy. The purchase price paid amounted to €6 million in total. The acquired goodwill of €1 million was allocated to the Scania Vehicles and Services segment.

The following table shows the final allocation of the purchase price to the assets and liabilities of the above-mentioned business combinations:

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€ million

 

IFRS carrying amounts at the acqui-
sition date

 

Purchase price allocation

 

Fair values at the acquisition date

Brand names

 

18

 

46

 

64

*

Excluding goodwill of Volkswagen AG.

Other noncurrent assets*

 

188

 

61

 

249

Cash and cash equivalents

 

14

 

 

14

Other current assets

 

163

 

5

 

168

Total assets

 

383

 

112

 

495

Noncurrent liabilities

 

67

 

35

 

101

Current liabilities

 

279

 

0

 

279

Total liabilities

 

345

 

35

 

380

The gross carrying amount of the receivables acquired was €86 million at the acquisition date, and the net carrying amount was €85 million (equivalent to the fair value). The depreciable noncurrent assets have maturities of between 18 months and 35 years.

The inclusion of the companies increased the Group’s sales revenue by €609 million and profit after tax by €1 million. If IDG and the business operations acquired by Scania had been included as of January 1, 2010, the Group’s sales revenue before consolidation would have been €95 million higher and profit after tax would have been €3 million higher.

The fair values of the assets and liabilities were determined mainly using observable market prices. If market prices could not be determined, methods based on the income approach were used to measure the assets acquired and liabilities assumed.

In addition, six domestic companies that were not consolidated in the previous year, seven newly acquired foreign companies, eight newly formed foreign companies and six foreign companies that were not consolidated in the previous year were initially consolidated. 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 foreign subsidiaries was also reduced by the sale of four companies and the merger and liquidation of six companies.

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