2008 Registration Document - Rexel

14. Financial information concerning the assets andliabilities, financial position and profits and lossesof Rexel3.1.2 Other transactions entered into with Soneparconcurrently with Hagemeyer acquisitionIn addition to the disposal of the Sonepar Entities, theagreement between Rexel and Sonepar provided thatRexel was to transfer to Sonepar its assets and businesseslocated in Germany and that Sonepar was to transfer toRexel its assets and businesses located in Sweden. Theprice of the said transfers was calculated on the basis ofthe same formula as the pricing for the transfers to Soneparof certain assets of Hagemeyer. In that respect, Rexel andSonepar completed these transactions in June 2008.Disposal of Rexel’s business in GermanyOn June 20, 2008, Rexel entered into a stock purchaseagreement with Sonepar for the sale of Rexel DeutschlandGmbH, the company which operated Rexel’s activities inGermany prior to the Hagemeyer’s transaction, for a totalconsideration of €177.0 million. The sale was completedon June 30, 2008 with the effective transfer of the sharesto Sonepar. Capital gain on disposal of Rexel DeutschlandGmbH amounted to €104.9 million before tax (see note 7.1other income and note 9.3 for tax effect). Following thetransfer of control of Rexel’s business to Sonepar whichwas deemed at completion of Hagemeyer offer, thiscompany has been deconsolidated as from April 1, 2008and was presented separately on line “Assets held for sale”as of March 31, 2008. As part of this agreement, Rexelprovided warranties on subsequent losses suffered by thebuyer in connection with certain claims from third partiesand tax claims incurred for periods up to the transactiondate with certain limitations. Warranties will expire at thefirst anniversary of the transaction except for tax matterswarranty which will expire at the earlier of three monthsafter the final tax assessment and the statutory limitationperiod for the relevant tax. Rexel GmbH has retainedpotential liabilities for certain claims for a maximum amountof €1 million.Acquisition of Sonepar’s business in SwedenOn June 18, 2008, Rexel entered into a stock purchaseagreement with Sonepar relating to the acquisition of MoelAktiebolag and Storel Aktiebolag, two companies operatingin Sweden with net sales of €200.1 million in 2007. The totalconsideration paid for these acquisitions was €84.4 millionplus acquisition costs of SEK3.1 million (€0.3 million). Aspart of this agreement, Sonepar provided warranties onsubsequent losses suffered by the buyer in connectionwith certain claims from third parties and tax claimsincurred for periods up to the transaction date with certainlimitations. Warranties will expire at the first anniversaryof the transaction except for tax matters warranty whichwill expire at the earlier of three months after the final taxassessment and the statutory limitation period for therelevant tax. These companies have been consolidated asfrom July 1, 2008. As at December 31, 2008, the goodwillrelated to this acquisition and determined on a provisionalbasis, amounted to €49.7 million (€56.8 million at theacquisition date).In aggregate, the net proceeds received from the disposalof the non-retained Hagemeyer entities for €731.5 million,and from the asset swap between Rexel’s business inGermany and Sonepar’s business in Sweden for a netamount of €90.5 million, together with the debt incurred bythe Sonepar Entities and transferred to Sonepar amountedto €1.7 billion.3.1.3 Other transactions entered into with third partiesconcurrently with Hagemeyer acquisitionThe following assets acquired through the businesscombination with Hagemeyer were disposed of in 2008 andclassified as assets held for sale at the acquisition date attheir fair value less costs to sell.Divestiture of Hagemeyer electrical supplies business inIrelandThe acquisition of Hagemeyer was authorised by theEuropean competition authorities subject to the divestitureof Hagemeyer’s electrical distribution business in Ireland.In accordance with this commitment, Rexel completed thesale of this business to EWL Electric Limited for €0.9 million(net of selling costs), in July 18, 2008.Divestiture of Bally Hong KongOn July 23, 2008, Rexel entered into an agreement todispose its 25% investment in Bally Hong Kong Ltd, anentity operating within the ACE division of Hagemeyer andspecialized in the wholesale of Bally’s product in Asia, toBally International Ltd for an amount of CHF11.9 million(€8.0 million). In addition, Rexel received a dividend for anamount of HK$19.0 million (€1.5 million) at completion ofthe transaction.Proceeds from disposal of subsidiaries, net of cashdisposed of amounted to €905.2 million for the yearended December 31, 2008 and mainly related to disposalof Sonepar Entities (for €731.5 million) disposal of Rexel’sbusiness in Germany (€162.8 million net of cash disposedof) and divestiture of Hagemeyer electrical supplies businessin Ireland and Bally Hong Kong (for respectively €0.9 millionand €9.5 million).PAGE 170 | REXEL 2008