Siemens 2006 Annual Report Download - page 171

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts) 167
aa) Acquisitions in fiscal 2006
In the fourth quarter of fiscal 2006, Siemens completed the acquisition of the immunodiag-
nostics provider Diagnostic Products Corporation, USA (DPC). The acquisition, which is inte-
grated into Med, will enable Siemens to expand its existing healthcare solutions portfolio. Pre-
liminary acquisition costs amount to €1,414 (including €94 cash acquired). DPC, now wholly
owned by Siemens, was consolidated as of August 2006. The Company has not yet finalized the
purchase price allocation. Based on the preliminary purchase price allocation, approximately
€260 was allocated to intangible assets subject to amortization and approximately €750 to
goodwill.
In fiscal 2006, the Company acquired a number of other entities, which are also not signifi-
cant individually, including the coal gasification business of the Swiss Sustec-Group, Whee-
labrator Air Pollution Control, Inc., USA, a supplier of air pollution control and reduction prod-
ucts and solutions for the coal-fired power and industrial markets, both at Power Generation
(PG), Electrium Limited, UK, a vendor of electrical installation systems at Automation and Dri-
ves (A&D) and Bewator, Sweden, a supplier of products and systems for access control solu-
tions at Siemens Building Technologies (SBT). The combined preliminary purchase price of
these acquisitions amounts to €393.
ab) Acquisitions in fiscal 2005
In May 2005, the Company acquired CTI Molecular Imaging, Inc. (CTI), USA. The primary rea-
son for the acquisition was to strengthen the Company’s commitment to molecular imaging
development. Siemens previously owned a 49% interest in a joint venture consolidated by CTI
before the acquisition of which Siemens was the primary customer. CTI was integrated into
Med and consolidated as of May 2005, when it became a wholly owned subsidiary. The acquisi-
tion costs amount to €809 (including €60 in cash acquired). Based on the final purchase price
allocation, €113 was allocated to intangible assets subject to amortization and €558 to good-
will. Of the €113 intangible assets, €60 was allocated to technology and €44 to customer rela-
tionships. Technology and customer relationships are amortized on a straight-line basis over
weighted-average useful lives of 10 years and 9 years, respectively.
In fiscal 2005, the Company acquired, in several steps, the Austrian engineering group
VA Technologie AG (VA Tech) for acquisition costs of €1,049 (including €535 cash acquired).
The VA Tech business was consolidated as of July 15, 2005, when it became a wholly owned
subsidiary of Siemens. VA Tech’s metallurgy, power transmission and distribution, and infra-
structure activities were mainly integrated into I&S and PTD to support their global market
targets. Smaller portions were integrated into other business activities. In order to comply
with a European antitrust ruling, the Company sold the majority of the VA Tech power genera-
tion business, including the hydropower activities, to Andritz AG of Austria, in May 2006. No
gain or loss was recorded in connection with the sale of this business. The difference between
the consideration received upon the sale and the book value of the business resulted in an
increase in goodwill. Based on the final purchase price allocation for the VA Tech acquisition,
approximately €130 was allocated to intangible assets subject to amortization and €1,120 to
goodwill. Of the €130 intangible assets, €55 was allocated to order backlog and €26 to tech-
nology. Order backlog and technology are amortized on a straight-line basis over weighted-
average useful lives of four and seven years, respectively.
Notes to Consolidated Financial Statements