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ACQUISITIONS ACQUISITIONS | 9 Months Ended
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Sep. 30, 2015
Acquisitions [Abstract] |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | ACQUISITIONS Taminco Corporation On December 5, 2014, the Company completed its acquisition of Taminco, a global specialty chemical company. The fair value of total consideration transferred was $2.8 billion, consisting of cash of $1.7 billion, net of cash acquired, and repayment of Taminco's debt of $1.1 billion. Taminco's former specialty amines and crop protection businesses are now operated as part of the Additives & Functional Products ("AFP") segment and its former functional amines business are now operated as part of the Specialty Fluids & Intermediates ("SFI") segment. For the preliminary purchase price allocation see Note 2, "Acquisitions", to the consolidated financial statements in Part II, Item 8 of the Company's 2014 Annual Report on Form 10-K. During third quarter 2015, the Company continued to refine its preliminary purchase price allocation with no adjustments to goodwill. As of September 30, 2015, the purchase price allocation remains preliminary as management completes its assessment of certain items, primarily environmental, legal, and tax. The purchase price allocation will be finalized in fourth quarter 2015. The following table summarizes the preliminary purchase price allocation for the Taminco acquisition. Any subsequent adjustments are not expected to have a material impact on the Company's results of operations.
Assets acquired and liabilities assumed |  |  |  |  |
(Dollars in millions) | December 31, 2014 |  | 2015 Net Adjustments to Fair Value |  | September 30, 2015
Current assets | $ | 266 |  |  | $ | (3 | ) |  | $ | 263 |
Properties and equipment | 658 |  |  | (3 | ) |  | 655 |
Intangible assets | 1,002 |  |  | (13 | ) |  | 989 |
Other noncurrent assets | 37 |  |  | 1 |  |  | 38 |
Goodwill | 1,509 |  |  | 32 |  |  | 1,541 |
Current liabilities | (161 | ) |  | 1 |  |  | (160 | )
Long-term liabilities | (546 | ) |  | (15 | ) |  | (561 | )
Total purchase price, net of cash acquired | $ | 2,765 |  |  | $ | — |  |  | $ | 2,765 |
Acquired intangible assets are definite-lived assets and consist primarily of customer relationships, developed technologies, and contracts.
Intangible Assets acquired |  |  |
(Dollars in millions) | Fair Value |  | Weighted-Average Amortization Period (Years)
Amortizable intangible assets |  |  |
Customer relationships | $ | 604 |  |  | 24
Developed technologies | 205 |  |  | 17
Contracts | 180 |  |  | 5
Total | $ | 989 |  |  |
Goodwill from the Taminco acquisition has been preliminarily allocated to certain of the Company's reportable segments as set out in the table below. None of the goodwill is deductible for tax purposes.
Goodwill | Goodwill by Segment
(Dollars in millions) |
Additives & Functional Products | $ | 918 |
Specialty Fluids & Intermediates | 623 |
Total | $ | 1,541 |
In third quarter and first nine months 2015, the Company recognized $4 million and $15 million, respectively in integration and transaction costs related to the acquisition. In 2014, the Company recognized $15 million in pre-close transaction and integration costs, and $13 million in pre-close financing costs related to the acquisition. Integration and transaction costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item and pre-close financing costs are included in the "Other (income) charges, net" and "Net interest expense" line items in the Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings. Commonwealth Laminating & Coating, Inc. On December 11, 2014, the Company acquired Commonwealth Laminating & Coating, Inc. ("Commonwealth") for a total cash purchase price of $438 million. The acquisition was accounted for as a business combination and is reported in the Advanced Materials ("AM") segment. There was no change to the final purchase price allocation from the preliminary allocation in the Company's 2014 Annual Report on Form 10-K, see Note 2, "Acquisitions", to the consolidated financial statements in Part II, Item 8 of the Company's 2014 Annual Report on Form 10-K. The following table summarizes the final purchase price allocation for the Commonwealth acquisition:
Assets acquired and liabilities assumed |
(Dollars in millions) | As of December 11, 2014
Current assets | $ | 51 |
Machinery and equipment | 38 |
Goodwill | 274 |
Intangible assets | 125 |
Long-term liabilities | (50 | )
Total purchase price | $ | 438 |
Current assets consist primarily of inventory acquired. Machinery and equipment acquired included a manufacturing operation in Martinsville, Virginia. Management valued machinery and equipment using the cost approach supported by published industry sources. Acquired intangible assets included customer relationships and developed technologies in the window film industry. Also acquired was the SunTek® brand name that is business-to-business in nature. Management valued intangible assets using the relief from royalty and multi-period excess earnings methods, both forms of the income approach supported by observable market data for peer chemical companies.
Intangible Assets acquired |  |  |
(Dollars in millions) | Fair Value |  | Weighted-Average Amortization Period (Years)
Amortizable intangible assets |  |  |
Customer relationships | $ | 72 |  |  | 14
Developed technologies | 41 |  |  | 18
Indefinite-lived intangible asset |  |  |
Brand name | 12 |  |  |
Total | $ | 125 |  |  |
In connection with this acquisition, the Company recognized goodwill equal to the excess of the purchase price over the estimated fair value of net tangible and intangible assets acquired and liabilities assumed. None of the goodwill is deductible for tax purposes. In third quarter and first nine months 2015, the Company recognized $1 million and $5 million, respectively in integration costs related to the acquisition. In 2014, the Company recognized $7 million in pre-close transaction and integration costs related to the acquisition. Integration and transaction costs were expensed as incurred and are included in the "Selling, general and administrative expenses" line item in the Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings. As required by purchase accounting, acquired inventories were marked to fair value. In first six months 2015, the remaining portion of these inventories was sold resulting in an increase in cost of sales of $7 million. Beginning in December 2014, the Company's consolidated results of operations included the results of Commonwealth. Based on applicable accounting and reporting guidance, the acquisition is not material to the Company's consolidated financial statements; therefore, pro forma financial information has not been presented.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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