Page 171 - 2012 Annual Report

171
VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
I - 2012 FINANCIAL REPORT
SECTION 1 MAJOR EVENTS
I - 2012 Financial Report
Preliminary comments:
On February 18, 2013, during a meeting held at the headquarters of the company, the Management Board approved the Annual Financial Report and
the Consolidated Financial Statements for the year ended December 31, 2012. Having considered the Audit Committee’s recommendation given at its
meeting held on February 15, 2013, the Supervisory Board, at its meeting held on February 22, 2013, reviewed the Annual Financial Report and the
Consolidated Financial Statements for the year ended December 31, 2012, as approved by the Management Board on February 18, 2013.
The Consolidated Financial Statements for the year ended December 31, 2012 have been audited and certified by the Statutory Auditors with no
qualified opinion. The Statutory Auditors’ Report on the Consolidated Financial Statements is included in the preamble to the Financial Statements.
SECTION 1 MAJOR EVENTS
As publicly announced to shareholders on several occasions in 2012,
Vivendi’s Management Board and its Supervisory Board have engaged
in a review of the group’s strategic development marked by a desire
to strengthen its positions in media and content. Given the stage of
completion of this strategic review and considering the uncertainty of the
timing of potential disposals of certain telecom businesses, none of the
group’s business segments met the criteria of IFRS 5 standard neither as
of December 31, 2012, nor as of February 18, 2013, the date of Vivendi’s
Management Board meeting that approved the Consolidated Financial
Statements for the year ended December 31, 2012.
Vivendi’s Management Board remains committed to focusing on
shareholder value creation, adjusted net income per share and
maintaining a long-term credit rating of BBB (Standard & Poor’s / Fitch)
/ Baa2 (Moody’s).
1.1. MAJOR EVENTS IN 2012
1.1.1. Acquisition of EMI Recorded Music by Vivendi and Universal Music Group (UMG)
In accordance with the agreement entered into with Citigroup Inc. (Citi)
on November 11, 2011, and following receipt of the regulatory approvals
from the European Commission and the Federal Trade Commission in the
United States on September 21, 2012, Vivendi and UMG completed the
acquisition of 100% of the recorded music business of EMI Group Global
Limited (EMI Recorded Music) on September 28, 2012. EMI Recorded
Music has been fully consolidated since that date. The transaction was
also unconditionally cleared in New-Zealand (June 21, 2012), Japan
(July 9, 2012), and Canada (August 20, 2012).
The purchase price, in enterprise value, amounted to £1,130 million
(approximately €1,404 million) and included €1,363 million paid in cash
of which £991 million (approximately €1,230 million) was paid in early
September 2012, when conditions to payment were satisfied. As part of
this transaction, Citi agreed to assume the full pension obligations in the
United Kingdom, and UMG received commitments customary for this type
of transaction. In addition, Citi undertook to indemnify UMG against losses
stemming from taxes and litigation claims, in particular those related to
pension obligations in the United Kingdom.
The approval by the European Commission was conditional upon the
divestment of EMI’s Parlophone label and certain other music assets
worldwide, such as EMI France, EMI’s classical music labels, Chrysalis,
Mute and several other local EMI entities. In accordance with IFRS 5,
Vivendi reclassified these assets as assets held for sale at market value in
the Consolidated Statement of Financial Position as of December 31, 2012.
The sale of Parlophone Label Group, part of EMI Recorded Music, for
£487 million (approximately €600 million after taking into account
the EUR/GBP foreign currency hedge in place) to be paid in cash, was
announced on February 7, 2013. Additional, less significant divestments
were also sold bringing the total amount of sales to exceed £530 million,
all of which are pending regulatory approvals.
With these sales, Vivendi nears the finalization of its regulatory
commitments following the acquisition of EMI Recorded Music,
while reinforcing UMG’s position as a worldwide leader in music. The
combination of UMG’s and EMI’s Recorded Music businesses is expected
to generate annual synergies of more than £100 million as previously
stated. As a result of the sale of Parlophone Label Group, the acquisition
of EMI Recorded Music acquisition will be at less than 5xEBITDA multiple,
including disposals, restructuring charges and synergies.
For a detailed description of this transaction and of its impact on Vivendi’s
financial statements, please refer to Note 2.1 to the Consolidated Financial
Statements for the year ended December 31, 2012.