Annual Report and Financial Statements 2007 - Tesco PLC

Note 26 Business combinations continued
dunnhumby Limited
On 19 April 2006, the Group acquired a further 31% of the share capital of one of its joint ventures, dunnhumby Limited, a data analysis
group incorporated in the United Kingdom, making it a subsidiary entity.
On the same day, the minority shareholders of dunnhumby entered into an agreement to sell their remaining share of the business
to Tesco in two tranches by 2011. The purchase price will reflect the valuation of these shares on the purchase dates. Under IAS 32,
the net present value of the future payments are shown as a financial liability, the value of which was £38m at 24 February 2007.
The fair value of the identifiable assets and liabilities of dunnhumby Limited as at the date of acquisition were:
Pre-acquisition Recognised
carrying Fair value values on
amounts adjustments acquisition
£m £m £m
Property, plant and equipment 4 – 4
Intangible assets 1 – 1
Investment in joint venture 3 – 3
Deferred income tax asset 1 – 1
Trade and other receivables 16 – 16
Cash and cash equivalents 12 – 12
Trade and other payables (19) – (19)
Net assets 18 – 18
Minority interest (3)
Transferred from investment in joint ventures (10)
Net assets acquired 5
Goodwill arising on acquisition of additional shares (in addition to previously held goodwill of £10m) 25
Consideration:
Cash consideration 30
Costs associated with the acquisition –
Total consideration 30
From the date of acquisition, the acquired business has contributed £32m to revenue and £5m of operating profit to the Group.
Other acquisitions
The other acquisitions in the year include the share capital or the trade and assets of Edeka, Hikso Limited, Maintenance One
Limited and Tesco Home Shopping Limited. The companies acquired undertake activities including retailing, software development
and maintenance services.
The book and fair values of the identifiable assets and liabilities as at the date of acquisition are disclosed in the table below:
30
Pre-acquisition Recognised
carrying Fair value values on
amounts adjustments acquisition
£m £m £m
Property, plant and equipment 6 – 6
Inventories 2 – 2
Bank loans and overdrafts (3) – (3)
Trade and other payables (2) – (2)
Net assets 3 – 3
Transferred from investment in joint ventures 2
Net assets acquired 5
Goodwill arising on acquisition 13
Consideration:
Cash consideration 18
Costs associated with the acquisition –
Total consideration 18
The post-acquisition contribution of the other acquisitions to the Group was £33m to revenue and £2m of operating losses.
18
93
NOTES TO THE GROUP
FINANCIAL STATEMENTS