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Note 7 Discontinued operations
and assets held for sale


In connection with the acquisition of ICI, AkzoNobel had entered into an agreement with Henkel to sell all assets and liabilities comprising the business divisions known within the ICI Group as the Adhesives business and the Electronic Materials business for £2.7 billion (€3.6 billion) in cash. This transaction took place early April 2008. The businesses that were sold to Henkel in April 2008 qualified as discontinued operations during 2008.

During 2008, we classified National Starch as a discontinued operation. However, the intended sale did not take place in 2008 and, in accordance with IFRS, we have re-classified National Starch within continuing operations.

Results from discontinued operations

 

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in € millions

 

 

 

2008

2007

 

 

 

Revenue

3,285

Expenses

(2,656)

Results from operating activities

629

 

 

 

Income tax

(169)

Interest and other results on Henkel settlement

(4)

Results from operating activities,
net of income tax

(4)

460

 

 

 

Gain on the sale of Organon BioSciences

27

8,486

Income tax on the sale

(26)

 

 

 

Profit for the period

23

8,920

On November 19, 2007, AkzoNobel sold Organon BioSciences to Schering-Plough for an amount of €11 billion. During 2007, Organon BioSciences was presented as a discontinued operation.

AkzoNobel and Organon BioSciences will have continuing relationships for a limited period, mainly to complete the divestment and facilitate the transition. Further, AkzoNobel has provided several guarantees and indemnities, that are disclosed in note 22.

Balance Organon BioSciences at divestment date

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In € millions

 

 

2007

 

 

Intangible assets

158

Property, plant and equipment

1,153

Financial non-current assets

349

Inventories

876

Receivables

869

Non-current liabilities and provisions

(342)

Current liabilities

(983)

Net assets and liabilities

2,080

 

 

Cash received

10,971

Cash disposed of

(274)

 

 

Net cash inflow

10,697

Deal result Organon BioSciences

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In € millions

 

 

2007

 

 

Net cash inflow

10,697

Net assets and liabilities

(2,080)

Liabilities assumed and cost allocated to the deal

(107)

Realization cumulative translation reserves

(24)

 

 

Deal result before tax

8,486

In connection with the acquisition of ICI, the European and Canadian authorities had accepted a commitment package from AkzoNobel involving the divestment of a number of AkzoNobel Decorative Paints businesses in the UK, Ireland, Belgium and Canada, which together contributed approximately €300 million to 2007 revenue. These entities were not ready for immediate sale and therefore did not qualify as assets held for sale at December 31, 2007. Starting January 1, 2008, these businesses were transferred from segment Decorative Paints to the “other” category. In 2008, we recorded an impairment charge of €65 million. The result on the sale totaled a loss of €23 million.

The assets held for sale amounted to €4 million at December 31, 2008 and is related to former ICI entities which were sold, but not yet disentangled.

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