2.3.1.1. Medical companies
Tomma
On 29 October 2019, PZU Zdrowie signed with THC SICAV-RAIF SA a preliminary agreement and on 9 December 2019 the final agreement on the purchase of 150,000 shares in Tomma, representing 100% of the company’s share capital and carrying the right to 100% votes at its shareholder meeting. At the same time, PZU Zdrowie, and thus also PZU, became an indirect owner of the following subsidiaries of Tomma: Asklepios Diagnostyka sp. z o.o. and Bonus-Diagnosta sp. z o.o., in which Tomma holds a 100% stake and 100% of votes at the shareholder meeting.
Since the date of obtaining control, i.e. 9 December 2019, all the companies have been consolidated.
FCM
On 13 March 2019 PZU Zdrowie SA entered into a preliminary agreement and on 3 June 2019 a final agreement with Falck Danmark A/S to acquire 403,551 shares in FCM, which constituted 100% of the share capital and offering 100% of votes at the shareholder meeting, with par value of PLN 50 each. At the same time, PZU Zdrowie SA, and thereby also PZU, became the indirect owner of Starówka sp. z o.o. in which FCM has a 100% equity stake.
Since the date of obtaining control, i.e. 3 June 2019, both companies have been consolidated.
Alergo-Med Tarnów sp. z o.o.
On 31 January 2019, PZU Zdrowie acquired 1,432 shares in Alergo – Med Tarnów sp. z o.o. representing 100% of the share capital and 100% of the votes at the shareholder meeting with a par value of PLN 500 each.
Since the date of obtaining control, i.e. 31 January 2019, Alergo – Med sp. z o.o. has been consolidated.
2.3.1.2. Other acquisitions
Corsham sp. z o.o.
On 4 February 2019 Alior Bank acquired 100 shares in Corsham sp. z o.o. representing 100% of the share capital and 100% of votes at the shareholder meeting with a par value of PLN 50 each.
Since the date of obtaining control, i.e. 4 February 2019, Corsham sp. z o.o. has been consolidated.
2.3.1.3. Settlement of the acquisition
The allocation process of the share purchase prices was carried out based on accounting data:
- FCM and Starówka sp. z o.o. – as at 31 May 2019;
- Tomma, Asklepios Diagnostyka sp. z o.o. and Bonus-Diagnosta sp. z o.o. – as at 30 November 2019.
It was decided that no material differences existed between accounting data on the dates for which the accounting data were prepared and the dates of obtaining control, which is respectively between 31 May and 3 June 2019 (for FCM and Starówka sp. z o.o.) and between 30 November and 9 December 2019 (for Tomma, Asklepios Diagnostyka sp. z o.o. and Bonus-Diagnosta sp. z o.o.).
The consolidated financial statements contain the final fair value of the acquired assets and assumed liabilities of FCM and Starówka sp. z o.o. In the process of calculating goodwill:
- intangible assets not previously recognized in the financial statements of FCM and Starówka sp. z o.o. were recognized;
- fair value measurement of assets and liabilities presented in the financial statements of FCM and Starówka sp. z o.o. was performed;
- no contingent liabilities requiring recognition were identified;
- no potential indemnification assets requiring recognition were identified.
The final settlement of the transaction is presented below on the basis of the fair value of the acquired assets and liabilities.
By the date of signing the consolidated financial statements the purchase price allocation process of Tomma, Asklepios Diagnostyka sp. z o.o. and Bonus-Diagnosta sp. z o.o. has not been completed. A credible and reliable calculation of the fair value of acquired assets and liabilities requires a large amount of data to be collected and processed in order to make correct calculations. Consequently, this process could not be completed between the date of obtaining control and the date of signing of the consolidated financial statements.
The final purchase price for Tomma shares will be adjusted, in accordance with the terms of the agreement, based on the final settlement of the transaction approved by both parties.
At the end of the purchase price allocation process, IFRS 3 requires one year from the transaction date.
The tables below present the purchase price allocation of the acquisition of medical companies.
Goodwill will not reduce taxable income.
Financial data of acquired entities
The following table presents the financial data of entities acquired in 2019 and included in the consolidated profit and loss account. The data have been prepared in accordance with IFRS and cover the period in which these companies were under the PZU Group’s control.
Consolidated profit and loss account taking into account acquired entities
The table below presents the profit and loss account of the PZU Group, taking into account the financial data of acquired subsidiaries calculated as if the beginning of the year was the acquisition date for all the combinations effected during the year.
2.3.1.4. Spółdzielcza Kasa Oszczędnościowo-Kredytowa Jaworzno
On 31 January 2019, the KNF decided that Alior Bank would take over Spółdzielcza Kasa Oszczędnościowo-Kredytowa Jaworzno (SKOK Jaworzno). In line with KNF’s decision, starting on 1 February 2019, Alior Bank assumed management over the assets of SKOK Jaworzno, which was acquired by Alior Bank as of 1 April 2019.
The acquisition of SKOK Jaworzno was accounted for using IFRS 3. The process was carried out with the assumption that the Bank Guarantee Fund would provide aid to Alior Bank pursuant to Article 264 of the Bank Guarantee Fund Act and it would not require payment by Alior Bank. The aid from BFG involved provision of a subsidy and extension of a guarantee to cover losses resulting from the risk associated with the SKOK Jaworzno’s property rights being acquired. The BFG subsidy was granted to cover the difference between the value of the acquired property rights and the liabilities arising from guaranteed funds of SKOK’s depositors. On 22 November 2019 Alior Bank received a subsidy in the amount of PLN 110 million.
Settlement of the acquisition
Pursuant to the provisions of IFRS 3, the PZU Group recognized the acquired assets and liabilities at fair value.
The fair value of the SKOK Jaworzno’s loan portfolio was calculated for loans with no recognized impairment (performing portfolio). For these loans, the calculation was based on contractual cash flows adjusted for credit risk and prepayments. The fair
value of the SKOK’s performing loan portfolio was determined by using a discounted cash flow model by using the observed market values of interest rates adjusted for liquidity margins and cost of capital, broken down into homogeneous sub-portfolios. The fair value of the non-performing loan portfolio was assumed to be equal to the carrying amount due to the expected insignificant recovery levels.
The fair value of client and bank deposits and other financial liabilities maturing within 1 year is more or less equal to their carrying amount. When calculating the fair value of financial liabilities with residual maturity above 1 year, the present value of expected payments is calculated based on the current interest rate curves. No difference was observed between this measurement and the carrying amount, as a result of which the fair value was not adjusted.
Also, deferred tax assets of PLN 20 million were recognized in connection with the acquired assets and liabilities accepted as a result of the merger.
Gain from a bargain purchase is recognized in other operating income.
