On 5 August 2008 the Group acquired a 63.3% shareholding in Anglo Ferrous Brazil SA, which holds a 51% interest in the Minas-Rio iron ore project (Minas-Rio) and a 70% interest in the Amapá iron ore system (Amapá) at a price of R$28.147 ($18.056) per share. At that time the Group committed to extend the offer to the minority shareholders of Anglo Ferrous Brazil SA. This offer was formally made on 31 October 2008 and as a result, the Group's shareholding in Anglo Ferrous Brazil SA at 31 December 2008 was 98.9%. Total cash paid to acquire a controlling interest was $3.5 billion. A further $2.0 billion was paid (including cash settlement of a related derivative instrument ($0.7 billion)) to subsequently acquire minority interests.
This transaction followed on from the prior year acquisition of a 49% interest in each of Minas-Rio and LLX Minas-Rio, which owns the port of Açu (presented as a comparative in the Acquisition of material joint ventures section).
As a result of these transactions the Group's effective shareholding in each of the operating entities at 31 December 2008 was 99.4% in Minas-Rio, 49% in LLX Minas-Rio and 69.2% in Amapá.
In the year ended 31 December 2008, the Group purchased 7,941,964 shares (2007: 4,435,086 shares) in Anglo Platinum Limited for total consideration of $1,108 million (2007: $671 million). The cash paid in the year ended 31 December 2008 was $1,113 million (2007: $658 million). In the year ended 31 December 2007, the Group also acquired 3,353,108 shares in Anglo Platinum Limited through a dividend reinvestment plan. The Group's shareholding in Anglo Platinum Limited increased from 76.5% at 31 December 2007 to 79.6% at 31 December 2008.
The carrying value and fair value of the net assets at the date of acquisition of a controlling interest and related net cash outflows are shown below. The fair values presented are provisional, and will be finalised in 2009 when the final fair values arising from the fair value assessments are confirmed.
|Anglo Ferrous Brazil SA(2)||Other(3)|
|Net assets acquired|
|Other non-current assets||57||96||1||13||109||12|
|Add: Value attributable to reserves and resources acquired, net of deferred tax(4)||1,590||59||1,649||4|
|Less: Investments in associates previously recorded||–||–||–||(9)|
|Less: Fair value of assets contributed||–||–||–||(59)|
|Fair value of net assets acquired||1,962||159||2,121||127|
|Partial funding of partner cash calls||–||–||–||(12)|
|Goodwill arising on acquisitions||1,556||54||1,610||51|
|Negative goodwill arising on acquisitions||–||–||–||(2)|
|Total cost of acquisitions||3,518||213||3,731||164|
|Net cash acquired||243||12||255||11|
|Cash paid in prior year||–||–||–||30|
|Net cash paid(5)(6)||3,275||201||3,476||123|
The Group made one material acquisition of a joint venture in the year ended 31 December 2008 (2007: one).
On 29 February 2008 Anglo Coal Australia completed the acquisition of a 70% interest in the Foxleigh joint venture (Foxleigh) in Queensland, Australia. The total cost of acquisition was $606 million. The Group has proportionately consolidated 70% of Foxleigh from 29 February 2008.
The carrying value and provisional fair value of the net assets at the date of acquisition and related net cash outflow for material joint venture acquisitions are shown below:
|Fair value||Fair value|
|Net assets acquired|
|Value attributable to reserves and resources acquired||–||684||151||1,770|
|Other tangible assets||108||108||–||86|
|Other non-current assets||–||–||–||16|
|Fair value of net assets acquired and total cost of acquisitions||65||606||244||1,208|
|Net cash acquired||1||–||48|
|Net cash paid(2)||605||2||1,112|