2010Annual Report - Schneider Electric CZ, s.r.o.

Note 2 Changes in the scope of consolidation
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Group’s consolidated fi nancial statements for the year ended December 31, 2010 include the accounts of the companies listed in note 32.
The scope of consolidation at December 31, 2010 can be summarised as follows:
Dec. 31, 2010
Dec. 31, 2009
Number of companies France International France International
Parent company and fully consolidated subsidiaries 57 492 60 477
Proportionally consolidated companies - 1 - 1
Companies accounted for by the equity method 1 5 1 3
Sub-total by region 58 498 61 481
TOTAL 556 542
2.1 - Acquisition of Areva T&D’s Distribution
business
On June 7, 2010 (closing date), a consortium comprising Alstom
and Schneider Electric acquired all of Areva T&D’s capital for
EUR2.29 billion. The two consortium partners also fi nanced the
repayment of Areva T&D’s debt towards the Areva Group. As the
buyer of the Distribution business, Schneider Electric fi nanced the
equity value in the amount of EUR815 million and the debt refi nancing
in the amount of EUR323 million. The transaction agreements specify
no liability guarantee clause or earn-out payments.
The Consortium agreement stipulates that, as of the transaction
date, Schneider Electric immediately became the sole owner, with
exclusive control, of the Distribution business previously held by
Areva (and within the limit of Areva’s holding) and acquired through
the Consortium. Consequently, the Distribution business was fully
consolidated as of June 7, 2010, whilst the Transmission business
was entirely excluded from the scope of consolidation.
In accordance with standard IFRS 3 R, Schneider Electric valued
the assets acquired and liabilities assumed at their fair value on the
date of acquisition. This resulted in preliminary goodwill, which may
be adjusted over a maximum period of 12 months starting from the
acquisition date, according to new information relating to the facts
and circumstances existing on the acquisition date. The provisional
allocation of the acquisition price breaks down as follows:
Before allocation (provisional)
of acquisition price PPA
After allocation (provisional)
of acquisition price
Acquisition price 1,138
Non-current assets
Current assets (excluding cash
437 170 607
and cash equivalents) 992 - 992
Cash and cash equivalents 33 - 33
Total assets 1,462 170 1,632
Financial liabilities 45 - 45
Non-current liabilities excluding debt 167 121 288
Current liabilities excluding debt 799 54 853
Non-controlling interests 34 2 36
Total liabilities 1,045 177 1,222
GOODWILL 727
The valuation of the assets acquired at their fair value led principally to
the recognition of intangible assets in the amount of EUR164 million
(technology, backlog, inventories and customer relationships) and
to revaluations of property, plant and equipment in the amount
of EUR54 million; these assets were valued by independent
experts. Contingent liabilities were recognised for a total amount of
EUR155 million. The goodwill is not tax-deductible.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 167
5