Business combinations in 2018:

During the year ended December 31, 2018, the Company completed several business combinations, to complement its existing businesses and achieve synergies. The acquired entities individually and in aggregate were insignificant. Results of the acquired entities’ operations have been included in the Company’s consolidated financial statements since the acquisition dates.


	RMB
	(In millions)
Purchase consideration		2,378

Net assets acquired, excluding intangible assets and the related deferred tax liabilities		1,545
Intangible assets, net		1,424
Deferred tax liabilities		(292	)
Pre-existing equity interests		(1,651	)
Noncontrolling interests		(1,312	)
Redeemable non-controlling interests (Note 17)		(698	)
Goodwill		3,362

		2,378

The aggregate purchase price allocation includes acquisition of certain

acquirees

, which were equity method

investees

of the Company prior to the acquisitions. In aggregate, a

re-measurement

gain relating to the Company’s

pre-existing

equity interest of RMB

630

million was recognized during the year ended December

2018

. The Company applied the equity method of accounting by recognizing its share of the profit or loss in these equity method

investees

up to their respective dates of acquisition.

Goodwill, which is

non-deductible

for tax purpose

, is primarily attributable to the synergies expected to be achieved from the acquisitions.

Neither the results of operations since the acquisition dates nor the pro forma results of operations of the

acquirees

were presented because the effects of these business combinations, individually and in the aggregate, were not significant to the Company’s consolidated results of operations.

Business combinations in 2019:

During the year ended December 31, 2019, the Company completed several business combinations, total purchase consideration in aggregate was RMB1.2 billion (US$168 million), among which RMB978 million (US$140 million) was allocated to goodwill. The Company expects to achieve significant synergies from such acquisitions which it plans to complement its existing businesses. The acquired entities were considered insignificant, both individually and

in aggregate.

Results of the acquired entities’ operations have been included in the Company’s consolidated financial statements since the acquisition date.


	RMB			US$
	(In millions)
Purchase consideration		1,168			168

Net assets acquired, excluding intangible assets and the related deferred tax liabilities		229			33
Intangible assets, net		543			78
Deferred tax liabilities		(134	)		(19	)
Noncontrolling interests		(266	)		(38	)
Redeemable non-controlling interests (Note 1 7 )		(182	)		(26	)
Goodwill		978			140

		1,168			168

Goodwill, which is non-deductible for tax purposes, is primarily attributable to the synergies expected to be achieved from the acquisitions.

Neither the results of operations since the acquisition dates nor the pro forma results of operations of the acquirees were presented because the effects of these business combinations, individually and in the aggregate, were not significant to the Company’s consolidated results of operations.

The valuations used in the purchase price allocation described above were determined by the Company with the assistance of independent third-party valuation firms. The valuation reports considered generally accepted valuation methodologies such as the income, market and cost approaches. As the acquirees are all private companies, the fair value estimates of

pre-existing

equity method investments or noncontrolling interests are based on significant inputs considered by market participants which mainly include (a) discount rate, (b) projected terminal value based on future cash flow (c) financial multiple of companies in the same industry and (d) adjustment for lack of control or lack of marketability.