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Acquisition of Signode | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisition of Signode | Acquisition of Signode On April 3, 2018, the Company completed its acquisition of Signode Industrial Group Holdings (Bermuda) Ltd. (“Signode”), a leading global provider of transit packaging systems and solutions, thereby broadening and diversifying its customer base. The Company paid a purchase price of $3.9 billion. The acquisition was undertaken by a subsidiary of Crown European Holdings S.A. See Note M for further details about the acquisition financing. In connection with the acquisition, the Company entered into forward contracts to partially mitigate its currency exchange rate risk associated with the purchase price. In March 2018, the Company settled these contracts at a loss of $25. The following table summarizes the consideration transferred to acquire Signode and the preliminary valuation of identifiable assets acquired and liabilities assumed at the acquisition date.
Fair value of consideration transferred
Cash consideration | $ | 3,912 |
Recognized amounts of identifiable assets acquired and liabilities assumed
Receivables, net | 374 |
Inventories | 303 |
Prepaid expenses and other current assets | 45 |
Intangible assets, net | 1,935 |
Property, plant and equipment, net | 450 |
Other non-current assets | 50 |
Short-term debt | (4 | )
Accounts payable | (222 | )
Accrued liabilities | (166 | )
Long-term debt | (3 | )
Postretirement and pension liabilities | (58 | )
Other non-current liabilities | (344 | )
Total identifiable net assets | 2,360 |
Goodwill | $ | 1,552 |
Signode comprises the Company's Transit Packaging segment. The acquired goodwill was assigned to the segment and is not expected to be deductible for tax purposes. Acquired property, plant and equipment will be depreciated over its estimated remaining useful lives on a straight-line basis. The fair value for acquired customer relationship intangibles was determined as of the acquisition date based on estimates and judgments regarding expectations for the future after-tax cash flows arising from the follow-on revenue from customer relationships that existed on the acquisition date over their estimated lives, including the probability of expected future contract renewals and revenue, less a contributory assets charge, all of which is discounted to present value. The fair value of the trade name intangible assets were determined utilizing the relief from royalty method which is a form of the income approach. Under this method, a royalty rate based on observed market royalties is applied to projected revenue supporting the trade names and discounted to present value using an appropriate discount rate. Acquired intangible assets will be amortized over the estimated useful lives, primarily on a straight-line basis. Intangible assets acquired and the weighted average remaining useful lives were as follows:
| Preliminary Fair Value |  | Weighted Average Estimated Useful Life
Customer relationships | $ | 1,201 |  |  | 12
Trade names | 568 |  |  | 26
Technology | 166 |  |  | 7
| $ | 1,935 |  |  |
The Company has not yet finalized the determination of the fair value of assets acquired and liabilities assumed, including income taxes and contingencies. The Company expects to finalize these amounts within one year of the acquisition date. Signode's results of operations have been included in the Company's financial statements for the period subsequent to the completion of the acquisition on April 3, 2018. Signode contributed sales of $1,800 and $1 of net income as its results included acquisition related amortization and interest as well as pre-tax charges of $40 for the fair value adjustment to inventory acquired and $5 for restructuring and other. The following unaudited supplemental pro forma data presents consolidated information as if the acquisition had been completed on January 1, 2017. These amounts were calculated after adjusting Signode's results to reflect interest expense incurred on the debt to finance the acquisition, additional depreciation and amortization that would have been charged assuming the fair value of property, plant and equipment and intangible assets had been applied from January 1, 2017 and related transaction costs. These adjustments also include an additional charge of $32 in the year ended December 31, 2017 for the fair value adjustment for inventory acquired. Signode's results include foreign exchange losses related to pre-acquisition intercompany debt arrangements of $15 and $47 for the years ended December 31, 2018 and 2017.
| Unaudited pro forma data for the year-ended December 31,
| 2018 |  | 2017
Pro forma net sales | $ | 11,739 |  |  | $ | 10,930 |
Pro forma net income attributable to Crown Holdings | 442 |  |  | 234 |
The unaudited supplemental pro forma financial information is based on the Company's preliminary assignment of purchase price and therefore subject to adjustment upon finalizing the purchase price assignment. The pro forma data should not be considered indicative of the results that would have occurred if the acquisition and related financing had been consummated on the assumed completion dates, nor are they indicative of future results.

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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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