4.4 Legal risk - Scor

Provisional and final fair value of assets and liabilities acquired
TRANSAMERICA RE: FAIR VALUE OF ASSETS AND LIABILITIES
ACQUIRED AS AT 9 AUGUST 2011
In EUR million (1) 2011
Provisional
2012
Adjustments
Assets
2012
Final
Value of business acquired 540 6 546
Investments 866 5 871
Share of retrocessionaires in contract liabilities (115) (30) (145)
Other assets 435 (31) 404
Cash and cash equivalents 494 - 494
TOTAL ASSETS 2,220 (50) 2,170
Liabilities
Contract liabilities 1,152 (11) 1,141
Other liabilities 298 (38) 260
TOTAL LIABILITIES 1,450 (49) 1,401
Fair value of net assets 770 (1) 769
Consideration (646) 2 (644)
Impact of foreign exchange 3 (1) 2
Gain from bargain purchase (2) 127 - 127
(1) Based on the EUR/USD exchange rate at the date of acquisition
(2) Gain from bargain purchase valued at the average EUR/USD exchange rate of 0.7148 for the year ended 31 December 2011
The provisional accounting for the acquisition of Transamerica Re generated a gain from bargain purchase of
EUR 127 million as the fair value of net assets of EUR 770 million was in excess of the aggregate consideration of
EUR 646 million. The gain from bargain purchase included an impact of EUR 3 million foreign exchange gain using the
average EUR/USD exchange rate of 0.7148 for the year ended 31 December 2011.
In March 2012, SCOR agreed with AEGON on the conclusion of the settlement for the acquired business and received a
closing payment in May 2012.
On 9 August 2012, the accounting was finalized with no material changes in fair value of net assets acquired
(EUR 769 million). These changes reflect the availability and use of more up to date information.
Intangible assets
Historic intangible assets, including goodwill, deferred acquisition costs and value of business acquired (VOBA) have been
de-recognized.
Value of business acquired (VOBA)
The VOBA has been estimated at EUR 546 million based on the best estimate of expected future profits using a discount
rate including an appropriate risk premium.
This intangible asset will be amortized over the lifetime of the underlying treaties, in line with expected emergence of profits.
Investments
Fair values have been determined for investments based mainly on quoted market prices. If quoted market prices were not
available, valuation models were applied.
Share of retrocessionaires in contract liabilities
Mathematical reserves, claims reserves and share of retrocessionaires in Contract Liabilities have been recorded based on
best estimate assumptions at the time of acquisition.
Other assets and liabilities
Other assets and liabilities have been recorded at their estimated fair value.
Deferred tax has been recognized on the timing differences arising from the purchase price allocation. These balances
represent payable and recoverable amounts which the SCOR Group expects to realize.
Gain from bargain purchase
The management of SCOR measured the fair value of the separately recognizable identifiable assets acquired and the
liabilities assumed as at the acquisition date. The cost of the investment was lower than the fair value of the net assets
acquired. This difference, or gain from bargain purchase of EUR 127 million, was recorded in the consolidated statement of
income for the year ended 31 December 2011 of the SCOR Group.
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