Siemens 2005 Annual Report Download - page 154

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3 Acquisitions, dispositions and discontinued operations
a) Acquisitions
During the years ended September 30, 2005 and 2004, the Company completed a number of
acquisitions. These acquisitions have been accounted for under the purchase method and have
been included in the Company’s Consolidated Financial Statements since the date of acquisition.
On a fiscal year basis, none of these acquisitions are considered material, individually or in the
aggregate.
aa) Acquisitions in fiscal 2005
In May 2005, the Company acquired CTI Molecular Imaging, Inc., USA (CTI). The primary reason
for the acquisition is to strengthen the Company’s commitment to molecular imaging develop-
ment. Siemens previously owned a 49% interest in a joint venture consolidated by CTI before the
acquisition of which Siemens was the primary customer. CTI is integrated into Med and was con-
solidated as of May 2005, when it became a wholly owned subsidiary. Preliminary acquisition
costs amount to €794 (including €60 cash acquired). The Company has not yet finalized the
purchase price allocation. Based on the preliminary purchase price allocation, approximately
€112 was allocated to intangible assets and €525 to goodwill.
In fiscal 2005, the Company acquired, in several steps, the Austrian engineering group VA
Technologie AG (VA Tech) which is now a wholly owned subsidiary of Siemens for preliminary
acquisition costs of approximately €1,049 (including €535 cash acquired). The VA Tech business
is consolidated as of July 15, 2005. VA Tech’s metallurgy, power transmission and distribution,
and infrastructure activities will mainly be integrated into I&S and PTD to support their global
growth targets. Smaller portions will be integrated into other business activities. The purchase
price allocation is not yet final. Based on the preliminary purchase price allocation, €1,027 was
allocated to goodwill and €128 to intangible assets that will be amortized over periods ranging
from one to seven years. In order to comply with a European antitrust ruling, the VA Tech power
generation business which includes the hydropower activities will be sold. Since the hydropower
business is subject to a regulatory hold separate agreement and Siemens has no influence over
the operations of the business, it is being held as a cost method investment until its disposal.
In July 2005, the Company completed the acquisition of all shares of Flender Holding GmbH,
Germany (Flender), a supplier of mechanical and electrical drive equipment, focusing on gear
technology. The primary reason for the acquisition was to enable the Company to offer a full drive
train (motor, inverter, gear) to customers. The business is being integrated into A&D and was
consolidated as of July 2005. Preliminary acquisition costs amount to €702. The Company has not
yet finalized the purchase price allocation. Based on the preliminary purchase price allocation,
approximately €390 was allocated to intangible assets subject to amortization and €452 was
recorded as goodwill.
In fiscal 2005, the Company acquired Bonus Energy A/S, Denmark, a supplier of wind energy
systems and substantially all of the assets of Robicon Corporation, USA, a manufacturer of medi-
um voltage drives and power controls. The combined preliminary purchase price of the two
acquisitions amounts to €481.
Management’s discussion and analysis