Note 2: Scope of consolidation

Material subsidiaries

The Consolidated financial statements comprise the assets, liabilities, income and expenses of 261 legal entities. We consider legal entities material when they represent, for at least two subsequent years, more than 5% of either revenue or adjusted or based on qualitative aspects. Material subsidiaries included in the table in this Note are fully owned at year-end 2021.

Material subsidiaries related to continuing operations

Legal entity

Principal place of business/
country of incorporation

Akzo Nobel Coatings Inc.

US

Akzo Nobel Paints (Shanghai) Co Ltd.

China

Imperial Chemical Industries Limited

UK

Akzo Nobel Decorative Coatings B.V.

Netherlands

Akzo Nobel Coatings SPA

Italy

Acquisitions

On March 1, 2021, we acquired 100% of the shares of Industrias Titan S.A.U. (Titan Paints) in Spain, for €83 million. The acquisition strengthens our paints business and footprint in Spain. The transaction included three production facilities and seven logistics and service centres for decorative paints. Titan Paints generated revenues of around €80 million in 2020. The transaction resulted in €15 million of goodwill (non-deductible for tax purposes), €20 million of other intangible assets and €47 million of property, plant and equipment. The goodwill is mainly attributable to synergies expected to be achieved from integrating the company into the group.

On June 29, 2021, AkzoNobel announced to further expand its long-term position in South and Central America after reaching an agreement to acquire 100% of the Colombia-based paints and coatings company Grupo Orbis, with consolidated revenues of approximately €260 million (in 2020). Completion is subject to regulatory approvals and is expected in the first quarter of 2022.

Recognized fair values at acquisition

In € millions

Titan S.A.U.
Spain

Other*

Total 2021

Other intangibles

20

(1)

19

Property. plant and equipment

47

47

Inventories

19

19

Trade and other receivables

15

15

Cash and cash equivalents

10

10

Long-term debt

(1)

(1)

Provisions

(2)

(2)

Deferred tax assets/(liabilities)

(7)

(7)

Trade and other payables

(33)

(33)

Net identifiable assets and liabilities

68

(1)

67

Goodwill

15

2

17

Purchase consideration

83

1

84

Cash and cash equivalents acquired

(10)

(10)

To be paid in 2022 and later years

(1)

(1)

Net cash outflow

73

73

*

Other includes the purchase price adjustments with regard to the 2020 New Nautical Coatings acquisition.

Divestments

In 2021 and 2020, no significant divestments occurred.

Operating income

Operating income is defined in accordance with IFRS and includes the relevant identified items. Adjusted operating income excludes identified items.