On October 1, 2016, WACKER and Asahikasei Corporation signed an agreement for the purchase of a call option for an additional 1 percent of the shares in the subsidiary Wacker Asahikasei Silicone Co. Ltd., Japan (AWS) at a value of one Japanese yen. Up until that point in time, both shareholders had held 50 percent in the company and operated it as a joint venture. Due to this call-option agreement and the resulting potential voting rights, WACKER is deemed under IFRS 10 to have assumed control over this company, which had previously been accounted for using the equity method. The company was fully included in WACKER’s consolidated financial statements as of October 1, 2016. AWS produces various silicone products for Asian markets, in particular for Japan. The call option secures WACKER the possibility of acquiring control of the company in order to exert greater influence on its future growth.
The carrying amount of the stake previously accounted for using the equity method totaled €6.6 million as of October 1, 2016. A business valuation carried out by an external expert using an actuarial model resulted in a positive value adjustment of this stake in the amount of €9.9 million. The valuation was based on the company’s cash flow planning. Remeasurement as part of the deemed disposal of the previously held equity interests and currency-translation effects previously recognized within other comprehensive income resulted in other operating income of €10.0 million.
The purchase price allocation was concluded on December 31, 2016. At the acquisition date, the fair value of the acquired assets totaled €48.7 million, with €23.2 million in noncurrent assets and €25.5 million in current assets. The fair value of the acquired liabilities amounted to €22.2 million, with €11.1 million in noncurrent liabilities and €11.1 million in current liabilities. The transaction resulted in a small amount of goodwill of €3.2 million.
Full consolidation had no substantial impact on the Group’s sales and earnings. In Q4 2016, AWS posted sales of €12.9 million, EBITDA of €0.9 million and net income for the year of €0.7 million. The acquired receivables had a fair value of €7.8 million and solely comprised trade receivables. The fair value corresponded to the gross value of the receivables. Asahikasei’s non-controlling interest amounted to €13.2 million as of October 1, 2016.