Anglo American Annual Report 2012

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FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS32. ACQUISITIONSDe BeersOn 16 August 2012 Anglo American plc acquired an additional 40% of the share capital of De Beers Société Anonyme (De Beers) to bring its totalshareholding to 85%. De Beers is a leading diamond company with expertise in the exploration, mining and marketing of diamonds.The Group funded the acquisition by way of cash consideration of $5.2 billion, less cash acquired of $0.4 billion. The acquisition has been accounted for asa business combination using the acquisition method of accounting with an effective date of 16 August 2012, being the date the Group gained control ofDe Beers.The provisional fair values of identifiable assets and liabilities of De Beers as at the date of acquisition were:US$ million 2012AssetsIntangible assets 1,588Property, plant and equipment (including mineral properties and projects) 8,912Investments in associates 12Deferred tax assets 247Inventory 2,133Other assets (1) 328Total assets 13,220LiabilitiesProvisions for liabilities and charges (including contingent liabilities (2) and retirement benefit obligations) (1,487)Deferred tax liabilities (1,097)Loans and borrowings (1,581)Other liabilities (468)Total liabilities (4,633)Net assets acquired 8,587Non-controlling interests (3) (1,423)Net attributable assets acquired 7,164Goodwill 2,355Net attributable assets including goodwill 9,519ConsiderationCash 5,223Net cash acquired with the subsidiary (407)Book value of existing shareholding 2,686Fair value gain on existing 45% shareholding (4) 2,017Total consideration 9,519(1)The fair value of other assets includes receivables of $202 million.(2)Contingent liabilities of $185 million relating to legal claims in various jurisdictions.(3)Non-controlling interests have been measured at their proportionate share of De Beers’ identifiable net assets.(4)Recognised as a non-operating remeasurement, see note 5.Goodwill recognised arises principally from the significant synergies associated with the Group having control of De Beers, the value associated with theDe Beers’ workforce and the requirement to recognise a deferred tax liability calculated as the difference between the tax effect of the fair value of the assetsacquired and their tax bases. No goodwill is expected to be deductible for tax purposes. Intangible assets acquired relate to brand names, customerrelationships and contracts.From the acquisition date, De Beers has contributed $2,353 million of revenue and $159 million of underlying earnings to the Group. If the acquisition hadcompleted on 1 January 2012, De Beers would have contributed revenue of $6,074 million for 2012 (an increase of $3,721 million) and underlying earningsof $399 million (an increase of $87 million).The Group’s attributable share of De Beers’ earnings from the acquisition date after special items and remeasurements (including special items andremeasurements charges of $319 million (after tax) relating to the reversal of fair value uplifts of inventory and depreciation and amortisation on fair valueuplifts of the Group’s pre-existing 45% shareholding) amounted to a $160 million loss. If the acquisition of De Beers had been completed on 1 January 2012,the Group’s attributable share of De Beers’ earnings (including special items and remeasurements charges of $485 million (after tax) relating to the reversalof fair value uplifts of inventory and depreciation and amortisation on fair value uplifts of the Group’s pre-existing 45% shareholding) would have amounted toa $80 million loss (increasing the Group’s loss attributable to equity shareholders by $76 million to $1,569 million).OtherOn 20 July 2012 Anglo American plc increased its shareholding in Kumba Iron Ore Limited by 4.5% through the exercise of options acquired in 2011 and 2012.This increased the Group’s shareholding from 65.2% to 69.7%, for a total cost of $948 million.The Group made no material acquisitions in 2011.182 Anglo American plc Annual Report 2012
33. DISPOSALS OF SUBSIDIARIES AND JOINT VENTURESUS$ million 2012 2011Net assets disposedProperty, plant and equipment 208 167Other non-current assets 65 79Current assets 347 461Current liabilities (187) (55)Non-current liabilities (273) (108)Net assets 160 544Non-controlling interests (5) (42)Net assets disposed 155 502Cumulative translation (gain)/loss recycled from reserves (6) 45Other charges 2 –Net (loss)/gain on disposals (1) (21) 337Net sales proceeds 130 884Net cash and cash equivalents disposed (38) (358)Accrued transaction costs and similar items 8 3Net cash inflow from disposals (2) 100 529(1)Included in non-operating special items, see note 5.(2)Net cash inflow in the year ended 31 December 2012 was nil in respect of disposals in 2011 (2011: $4 million in respect of disposals in 2010). Total net cash inflow from disposals in 2012 was$100 million (2011: $533 million). Of this, a net cash inflow of $100 million (2011: $514 million) related to disposals of subsidiaries and nil (2011: $19 million) related to the sale of interests injoint ventures.Disposal in 2012On 24 April 2012 the Group announced the sale of Scaw South Africa and related companies to an investment consortium led by the Industrial DevelopmentCorporation of South Africa (IDC) and Anglo American’s partners in Scaw South Africa, being Izingwe Holdings (Pty) Limited, Shanduka Resources (Pty)Limited and the Southern Palace Group of Companies (Pty) Limited, for a total consideration of $440 million on a cash and debt free basis. Following thisannouncement, Scaw South Africa was transferred to assets held for sale.The completion of the sale took place on 23 November 2012 for a combined net cash inflow of $100 million.Disposals in 2011Disposals of subsidiaries during 2011 mainly related to the disposal of Lisheen and a 74% interest in Black Mountain (the Group’s remaining zinc operations)and disposals of Tarmac businesses (China, Turkey and Romania) in the Other Mining and Industrial segment.34. ASSETS AND LIABILITIES HELD FOR SALEThe following assets and liabilities were classified as held for sale at 31 December 2012. The Group expects to complete the sale of these businesses within12 months of the reporting date. There were no assets or liabilities classified as held for sale at 31 December 2011.US$ millionAmapáTarmacQuarryMaterials Total (1)Intangible assets 1 418 419Property, plant and equipment 171 1,655 1,826Other non-current assets (2) 4 11 15Total non-current assets 176 2,084 2,260Inventories 103 111 214Trade and other receivables 157 292 449Cash and cash equivalents 26 201 227Total current assets 286 604 890Total assets classified as held for sale 462 2,688 3,150Trade and other payables (149) (406) (555)Short term borrowings (11) (3) (14)Provisions for liabilities and charges (3) (24) (27)Total current liabilities (163) (433) (596)Deferred tax liabilities – (150) (150)Provisions for liabilities and charges (59) (97) (156)Other non-current liabilities (2) – (17) (17)Total non-current liabilities (59) (264) (323)Total liabilities associated with assets classified as held for sale (222) (697) (919)Net assets 240 1,991 2,2312012Financial statements(1)The Group’s investments in Amapá and Tarmac Quarry Materials are included in the Other Mining and Industrial segment.(2)Other non-current assets relate to loans and receivables and investments in associates. Other non-current liabilities relate to government grants received.A loss on transfer to assets held for sale of $404 million for Amapá and $135 million for Tarmac Quarry Materials have been recognised in non-operatingspecial items, see note 5.Anglo American plc Annual Report 2012 183
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Anglo American plc20 Carlton House
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Anglo American Annual Report 2012

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