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BUSINESS ACQUISITIONS | 9 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS On March 1, 2018 ("the acquisition date"), Bunge acquired a 70% ownership interest in IOI Loders Croklaan ("Loders") from IOI Corporation Berhad ("IOI") for approximately $972 million in cash. The preliminary purchase price remains subject to final post-closing adjustments, which are expected during the fourth quarter of 2018. The transaction expands Bunge's value-added capabilities, reach, and scale across core geographies to establish Bunge as a global leader in B2B oil solutions. Loders' portfolio includes a full range of palm and tropical oil-derived products with strength in confectionery, bakery and infant nutrition applications. Loders serves global food industry customers in more than 100 countries around the world. The following table summarizes the preliminary allocation of the fair values of the assets acquired and liabilities assumed at the acquisition date, as included in Bunge's condensed consolidated balance sheet. Bunge is in the process of finalizing third-party valuations of certain acquired assets and tax items, and therefore, the measurements below are subject to change:
(US$ in millions) |
Cash and cash equivalents | $ | 82 |
Accounts receivable | 146 |
Inventories | 406 |
Other current assets | 67 |
Property, plant and equipment | 411 |
Intangible assets | 464 |
Goodwill | 243 |
Total assets | 1,819 |
Accounts payable | (108 | )
Other current liabilities | (100 | )
Deferred income taxes | (143 | )
Noncurrent liabilities | (35 | )
Total liabilities | (386 | )
Redeemable noncontrolling interest | (461 | )
Net assets acquired | $ | 972 |
Since March 1, 2018, goodwill decreased by $20 million as a result of measurement period adjustments, primarily related to post-closing adjustments of the purchase price. The following table provides the details of intangible assets acquired, by major class and weighted average useful life:
(US$ in millions) | Useful life |
Customer relationships | 15 years | $ | 265 |
Intellectual property | 10 years | 120 |
Trade names | 15 years | 51 |
Favorable leases | 38 years | 26 |
Other | various | 2 |
Total intangible assets |  | $ | 464 |
The $243 million of goodwill recognized was assigned to the Edible Oil Products segment. The goodwill recognized is primarily attributable to expected synergies and the assembled workforce of Loders. None of the goodwill is expected to be deductible for income tax purposes. The amounts of revenue and earnings of Loders included in Bunge's condensed consolidated statement of income from the acquisition date to the periods ended September 30, 2018 are as follows:
(US$ in millions) | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018
Net sales | $ | 395 |  | $ | 966 |
Income (loss) from continuing operations | $ | (4 | ) | $ | — |
The following represents the supplemental pro forma results of the combined entity as if Loders was acquired on January 1, 2017:
| Three Months Ended September 30, | Nine Months Ended September 30,
(US$ in millions) | 2018 | 2017 | 2018 | 2017
Net sales | $ | 11,412 |  | $ | 11,896 |  | $ | 34,497 |  | $ | 35,548 |
Income (loss) from continuing operations | $ | 368 |  | $ | 78 |  | $ | 345 |  | $ | 178 |
The supplemental pro forma amounts for income from continuing operations above have been adjusted to reflect additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied on January 1, 2017. Additionally, these amounts were also adjusted to reflect additional interest expense on the $1 billion of senior notes issued in connection with the acquisition, as if such issuance occurred on January 1, 2017. Supplemental pro forma income from continuing operations for the three and nine months ended September 30, 2018 were also adjusted to exclude $1 million and $11 million, respectively, of acquisition and integration related costs incurred in 2018, while 2017 supplemental pro forma income from continuing operations was adjusted to include these charges. Supplemental pro forma financial information is not necessarily indicative of the Company's actual results of operations if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. Amounts do not include any operating efficiencies or cost savings that the Company believes are achievable. The fair value in the opening balance sheet of the 30% redeemable noncontrolling interest in Loders was estimated to be $461 million. The fair value was estimated based as 30% of the total equity value of Loders based on the transaction price for the 70% stake in Loders, considering the cash paid and the value of the put/call provisions. See Note 16 for more information related to this redeemable noncontrolling interest. Other acquisitions On January 30, 2018, Bunge acquired Minsa Corporation ("Minsa") for an approximate initial purchase price of $75 million, subject to certain post-closing adjustments based on the net operating assets delivered on the closing date and the achievement of certain earnings targets based on results of the year ended December 31, 2017. As a result of the transaction, Bunge acquired two corn mills in the United States. The preliminary purchase price allocation resulted in $7 million of working capital, $38 million allocated to property, plant and equipment, $20 million to finite-lived intangible assets, and $10 million to goodwill. Bunge anticipates finalizing the purchase price by the first quarter of 2019.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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