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ACQUISITION OF BUSINESS | 6 Months Ended
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Jun. 30, 2022
Disclosure of detailed information about business combination [abstract] |
ACQUISITION OF BUSINESS | ACQUISITION OF BUSINESSOn May 25, 2022, American National was acquired by a wholly-owned subsidiary of the Company. Under the terms of the Merger Agreement, the Company acquired 100% of all American National issued and outstanding shares in exchange for $190 per share, which is equivalent to $5.1 billion. The Company acquired all assets and assumed all liabilities of American National as of the closing date, and consolidates the business for financial statement purposes. The following summarizes the consideration transferred, fair value of assets acquired and liabilities assumed at the acquisition date: (in millions)
Total consideration transferred for the acquisition | $ | 5,107 |
Assets acquired |
Cash and cash equivalents | 1,021 |
Investments | 22,518 |
Accrued investment income | 101 |
Reinsurance recoverables | 45 |
Premiums due and other receivables | 437 |
Deferred tax assets | 389 |
Property and equipment | 175 |
Prepaid pension | 149 |
Equity accounted investment | 1,402 |
Deferred acquisition costs | 273 |
Reinsurance assets | 386 |
Investment properties | 541 |
Other assets | 198 |
Separate account assets | 1,123 |
Total assets to be acquired | 28,758 |
Liabilities assumed |
Future policy benefits | 5,034 |
Policyholders' account balances | 13,940 |
Policy and contract claims | 1,706 |
Unearned premium reserve | 1,073 |
Other policyholder funds | 334 |
Notes payable | 158 |
Other liabilities | 449 |
Separate account liabilities | 1,123 |
Total liabilities to be assumed | 23,817 |
Less: Noncontrolling interest | (10) |
Net assets to be acquired | 4,931 |
Goodwill | $ | 176 |
Accounting for the acquisition is not finalized, and there remains some measurement uncertainty on the acquisition and June 30, 2022 balances, pending completion of a comprehensive evaluation of the net assets acquired. The interim financial statements at June 30, 2022 reflect management's current best estimate of the purchase price allocation. Final valuation of the assets acquired and liabilities assumed and the completion of the purchase price will occur by the end of the first quarter for 2023. As a result, the excess of the purchase price over the fair value of net assets acquired, representing goodwill of $176 million as at June 30, 2022, will be adjusted in future periods. Goodwill of approximately $176 million was recognized as a result of the acquisition. Goodwill recognized is not deductible for income tax purposes. Acquisition costs of $13 million were expensed at the acquisition date and recorded as Operating expenses on the Condensed Combined Consolidated Statements of Operations. The acquired business contributed revenues of $223 million and net profit of $16 million to the Company for the period from May 25 to June 30, 2022. If the acquisition had occurred on January 1, 2022, consolidated pro forma revenue and profit for the period ended June 30, 2022 would have been $1.9 billion and $169 million, respectively. These amounts have been calculated using the subsidiary's results and adjusting them for: •differences in the accounting standards and policies between the Company and American National, and •the revised depreciation and amortization that would have been charged assuming the fair value adjustments to investments, property and equipment and intangible assets had applied from January 1, 2022, together with the consequential tax effects.

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- Definition The entire disclosure for business combinations. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 3 -IssueDate 2021-01-01 -Section Disclosures -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=3&code=ifrs-tx-2021-en-r&doctype=Standard&dita_xref=IFRS03_g59-63__IFRS03_g59-63_TI -URIDate 2021-03-24 + Details
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