General Motors 2010 Annual Report Download - page 164

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Acquisition of Strasbourg
On October 1, 2010 we acquired 100% of the outstanding equity interest of General Motors Strasbourg S.A.S (GMS) for cash of
one Euro from MLC. GMS is an entity engaged in the business of developing and manufacturing automatic transmissions for luxury
and performance light automotive vehicles which was previously owned by Old GM but retained by MLC in connection with the 363
Sale. MLC was unable to sell GMS and upon notification of their plan to liquidate GMS, we agreed to repurchase the business. We
believe the repurchase of GMS allows us to maintain good relationships and to help expand our business within the European region.
We recorded the fair value of the assets acquired and liabilities assumed as of October 1, 2010, the date we obtained control, and
have included GMS’s results of operations and cash flows from that date forward. The following table summarizes the amounts
recorded in connection with the acquisition of GMS, which are included in our GME segment (dollars in millions):
Successor
October 1, 2010
Assets acquired and liabilities assumed
Cash ........................................................................................... $ 49
Accounts receivable (a) ............................................................................ 60
Inventory ....................................................................................... 56
Property, net .................................................................................... 25
Other non-current assets ........................................................................... 3
Current liabilities (b) .............................................................................. (116)
Non-current liabilities ............................................................................. (11)
Bargain purchase gain ........................................................................... $ 66
(a) Accounts receivable includes $32 million that is due from us.
(b) Current liabilities include $8 million that is due to us.
We determined that the excess of fair value over consideration paid was attributable to potential future restructuring scenarios made
necessary due to the uncertainty in sales demand beyond in-place supply agreements. Restructuring costs, if incurred, would be
expensed in future periods. As potential future restructuring activities do not qualify to be recorded as a liability in the application of
the acquisition method of accounting, none was recorded, and we recorded the excess as a bargain purchase gain, classified as Interest
income and other non-operating income, net. We did not provide the pro forma financial information because we do not believe the
information is material. We began to record the results of GMS operations in our consolidated financial statements from the date of
acquisition.
Sale of India Operations
In December 2009 we and SAIC Motor Hong Kong Investment Limited (SAIC-HK) entered into a joint venture, SAIC GM
Investment Limited (HKJV) to invest in automotive projects outside of markets in China, initially focusing on markets in India. On
February 1, 2010 we sold certain of our operations in India (GM India), part of our GMIO segment to HKJV, in exchange for a
promissory note due in 2013. The amount due under the promissory note may be partially reduced, or increased, based on GM India’s
cumulative earnings before interest and taxes for the three year period ending December 31, 2012. In connection with the sale we
recorded net consideration of $185 million and an insignificant gain. The sale transaction resulted in a loss of control and the
deconsolidation of GM India on February 1, 2010. Accordingly, we removed the assets and liabilities of GM India from our
consolidated financial statements and recorded an equity interest in HKJV to reflect cash of $50 million we contributed to HKJV and
a $123 million commitment to provide additional capital that we are required to make in accordance with the terms of the joint
venture agreement. We have recorded a corresponding liability to reflect our obligation to provide additional capital.
162 General Motors Company 2010 Annual Report