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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
236
Tiger Brands Limited Integrated Annual Report
2014
39 Business combinations
39.1 Dangote Flour Mills Plc (DFM)
2013
On 4 October 2012, Tiger Brands acquired 63,35% of the issued share capital of DFM, a company
based in Nigeria and engaged mainly in the manufacturing of flour, pasta and noodles, for a purchase
consideration of R1,5 billion less a warranty claim recognised of R27,5 million.
The purchase consideration was accounted for as follows:
(R’million)
Acquisition
value
Trademarks
134,1
Property, plant and equipment
2 370,8
Deferred tax asset
73,9
Inventory
868,0
Trade and other receivables*
728,9
Cash and cash equivalents
(32,4)
Short-term borrowings
(968,2)
Trade payables
(1 064,5)
Taxation payable
(31,1)
Long-term borrowings
(497,2)
Deferred tax liability
(214,0)
Fair value of net assets acquired
1 368,3
Non-controlling interest
(529,6)
Goodwill
646,3
Purchase consideration
1 485,0
*
Includes gross trade receivables of R811,7 million less allowance for doubtful debts of R326,3 million.
From date of acquisition to 30 September 2013, the DFM business contributed R3,4 billion to group
revenue and R277,7 million to losses after tax.
Non-controlling interests were calculated using the proportionate share method.
Goodwill represents the difference between the purchase consideration and the fair value of the net
assets acquired and provides Tiger Brands with access to new markets and improved synergies.
The purchase consideration was financed out of operating cash flows.
40 Subsequent events
There are no material events that occurred during the period subsequent to 30 September 2014, but
prior to these financial statements being authorised for issue.