The Best Beer Company in a Better World - Anheuser-Busch InBev

82 | Annual Report 2008 Financial Report
14. Goodwill
Million euro 2008 2007
Acquisition cost
Balance at end of previous year 13 834 12 305
Effect of movements in foreign exchange (3 414) 165
Acquisitions through business combinations 24 719 266
Purchases of minority interests 479 1 097
Other movements (5) 1
Balance at end of year 35 613 13 834
Impairment losses
Balance at end of previous year - -
Impairment losses (5) -
Balance at end of year (5) -
Carrying amount
at 31 December 2007 13 834 13 834
at 31 December 2008 35 608 -
Current year acquisitions through business combinations primarily reflect the Anheuser-Busch acquisition. This transaction resulted in the
recognition of goodwill of 24 661m euro. The other business combinations that took place during 2008 are the acquisitions of several local
distributors throughout the world – see note 6 Acquisitions and disposals of subsidiaries. These transactions resulted in recognition of goodwill
of 58m euro.
As a result of a share buy-back program of AmBev shares in 2008, AB InBev increased its interest percentage in AmBev from 61.01 % to 61.75 %.
Other purchases of minority interests relate to the buy out of AB InBev Shiliang (Zhejiang) Brewery and to the closing of AmBev’s tender offer
for Quinsa shares resulting in an increase of AmBev’s economic interest in Quinsa to 99.83 %. The increase of goodwill by 479m euro stems
from these transactions for which the total cash consideration amounted to 575m euro. As the related subsidiaries were already fully
consolidated, the purchases did not impact AB InBev’s profit, but reduced the minority interests and thus impacted the profit attributable to
equity holders of AB InBev.
Impairment losses of 5m euro were incurred following indications of impairments of local businesses in Italy and France.
The most relevant business combinations that took place during 2007 are the acquisition of all of the outstanding units of ‘Lakeport’ and the
acquisition of 100 % of Goldensand Comercio e Serviços Lda, the controlling shareholder of ‘Cintra’. These transactions resulted in recognition
of goodwill of 118m euro and 109m euro respectively. The company also acquired several local distributors throughout the world. Goodwill
recognized on these transactions amounted to 39m euro.
As a result of a share buy-back program of AmBev shares in 2007, AB InBev increased its interest percentage in AmBev from 58.36 % to 61.01 %.
As AmBev was already fully consolidated, the purchases did not impact AB InBev’s profit, but reduced the minority interests and thus impacted
the profit attributable to equity holders of AB InBev. As a result of this program, AmBev acquired 25.6m AmBev shares for an amount of 1 129m
euro. The goodwill increase by 1 097m euro stems from this share buy back program (1 095m euro) and the buy out of the remaining part of
minority interests of Nanjing InBev Jinling Brewery.