4.1 Changes in scope of consolidation

4.1.1 Additions, disposals and mergers

During the year under review, the scope of consolidation changed as follows:

Additions (acquisitions) 2019

Additions (increase in ownership) 2019

Additions (foundation) 2019

Disposals (divestments) 2019

Mergers 2019

During the previous year, the scope of consolidation changed as follows:

Additions (acquisitions) 2018

Additions (foundations) 2018

Disposals (divestments) 2018

4.1.2 Acquisitions and divestments

Assets and liabilities from acquisitions and divestments at the time control was acquired or lost

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CHF million

 

Total acquisitions 2019 Global Supply Company LLC

 

Total divestments 2019 GF Casting Solutions Herzogenburg Iron GmbH

 

Total acquisitions 2018

 

Total divestments 2018

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

19

 

 

Trade accounts receivable

 

2

 

–10

 

27

 

–95

Inventories

 

 

 

–11

 

43

 

–64

Other accounts receivable

 

 

 

 

 

4

 

–31

Property, plant, and equipment

 

 

 

–17

 

22

 

–87

Intangible assets

 

 

 

 

 

1

 

 

Deferred tax assets

 

1

 

 

 

 

 

–23

Other financial assets

 

 

 

 

 

9

 

 

Total assets

 

3

 

–38

 

125

 

–300

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

5

 

 

Non-interest bearing liabilities

 

1

 

–18

 

36

 

–233

Interest-bearing liabilities

 

 

 

–2

 

 

 

–34

Net assets

 

2

 

–18

 

84

 

–33

For this presentation, the translation of the original currency values into Swiss francs was calculated using the exchange rates of the respective transaction date. Total cash-out for the acquisition including earn-out payments amounted to CHF 5 million (previous year: CHF 154 million) while the cash-in for the divestment amounted to CHF 0 million (previous year: CHF 0 million) as explained in more detail below.

Acquisitions 2019

Acquisition Global Supply Company LLC

Acquisition of 100% of the shares of the specialized service provider for the marine industry, Global Supply Company LLC. Control was assumed as of 1 August 2019. Global Supply Company LLC services the retrofit market for cruise ships in the USA. The company will be renamed to GF Marine USA and merged into George Fischer LLC, Irvine, USA.

Divestments 2019

Divestment of GF Casting Solutions Herzogenburg Iron GmbH

Sale of 100% of the shares in the iron foundry in Herzogenburg supplying the automotive industry with a dedicated workforce of around 250 employees and annual sales of approximately CHF 75 million. GF facilitated the sale by providing a vendor loan of CHF 10 million to the buyers consisting of the former management. Because of the divestment, all assets and liabilities of the formerly fully owned company were deconsolidated as per 1 October 2019. See also note 5.2 for further details.

Acquisitions 2018

Acquisition of Precicast Industrial Holding SA

100% of the shares of the Swiss precision casting specialist, Precicast Industrial Holding SA, Novazzano (Switzerland), have been acquired, control of the acquired company was assumed on 1 April 2018.

Precicast Industrial Holding SA (Precicast) is one of the few independent precision casting companies in Europe, specializing in super alloy components for aero engines and industrial gas turbines. In addition, the company produces components out of additive manufacturing (3D printing) through Precicast Additive SA.

The company generated a turnover of approx. CHF 120 million in 2017 with a workforce of 730 employees in Switzerland and in Romania.

Divestments 2018

Divestment of iron casting plants Singen and Mettmann

The two iron casting plants in Singen and Mettmann (Germany) supplying the automotive industry with a dedicated workforce of around 2’000 employees and combined annual sales of CHF 617 million (for the eleven months in 2018) were deconsolidated on 1 December 2018 in form of a management buy-out. As a result of the divestment, all assets and liabilities of the formerly fully owned entities were deconsolidated.

GF retains a share of 20% in the equity of the divested GF Corporate Companies and also exercises a certain degree of influence on the divested entities. Consequently, GF records its share on the entities as investments in associates and applies the equity accounting method, see note 5.2.

For the acquisition of the two iron casting plants and the subsequent acquisition of production equipment GF provided vendor financing in the amount of CHF 62 million, see note 5.2 for further details. After taking into account the deconsolidation of the assets and liabilities, the accumulated currency translation effects as well as the related transaction costs and accruals, the transaction resulted in an even result in the income statement.

Accounting principles

Companies acquired are consolidated from the date on which control is obtained, while companies divested are excluded from the scope of consolidation as of the date on which control is lost, with any gain or loss recognized in the income statement.

Assets and liabilities of acquired companies are valued at actual values at the time control is obtained. Assets and liabilities of divested companies are valued at book values at the time control is lost. The translation of the local currency values into Swiss francs is done at the exchange rates of the respective transaction date.

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