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Acquisitions and Divestitures | 6 Months Ended
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Mar. 31, 2022
Business Combinations [Abstract] |
Acquisitions and Divestitures | NOTE B – ACQUISITIONS AND DIVESTITURES Acquisitions Personal Care acquisition On January 19, 2021, Ashland announced it had signed a definitive agreement to acquire the personal care business of Sch ü lke & Mayr GmbH, a portfolio company of the global investment organization EQT. The all-cash purchase price of Sch ü lke was $312 million, which was completed before the end of the June 30, 2021 quarter. During the three and six months ended March 31, 2021, Ashland incurred acquisition related transaction costs of $5 million, including $3 million of losses associated with foreign currency derivatives entered into to mitigate the foreign exchange exposure of the expected purchase price. The costs are recorded within the Income (loss) on acquisitions and divestitures, net caption in the Statements of Consolidated Comprehensive Income (Loss). Divestitures Performance Adhesives On February 28, 2022, Ashland completed the sale of its Performance Adhesives business. Proceeds from the sale were approximately $1.7 billion, net of transaction costs. Ashland recognized a $732 million gain on sale within the Income from Discontinued Operations caption of the Statements of Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2022. The transaction represented a strategic shift in Ashland’s business and had a major effect on Ashland’s operations and financial results. Accordingly, the operating results and cash flows related to Performance Adhesives have been reflected as discontinued operations in the Statements of Consolidated Comprehensive Income (Loss) and Statements of Condensed Consolidated Cash Flows, while the assets and liabilities that were sold have been classified within the Condensed Consolidated Balance Sheets as held for sale in periods preceding the sale. See Note C for the results of operations for Performance Adhesives for all periods presented. Certain indirect corporate costs included within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss) that were previously allocated to the Performance Adhesives segment do not qualify for classification within discontinued operations and are now reported as selling, general and administrative expense within continuing operations on a consolidated basis and within the Unallocated and other segment. These costs were $3 million and $4 million for the three months ended March 31, 2022 and 2021, respectively, and $7 million and $8 million for the six months ended March 31, 2022 and 2021, respectively. Following the completion of the sale, Ashland is expected to provide certain transition services to Arkema for a fee. While the transition services are expected to vary in duration depending upon the type of service provided, Ashland does not expect these transition services, or related fees, will be significant. Other manufacturing facility sales During the six months ended March 31, 2021, Ashland completed the sale of a Specialty Additives facility. Net proceeds received from the sale were approximately $14 million in the December 31, 2020 quarter ($20 million in total including a deposit received in fiscal year 2020). Ashland recognized a pre-tax gain of $14 million recorded within the Income (loss) on acquisitions and divestitures, net caption in the Statements of Consolidated Comprehensive Income (Loss). Other corporate assets During the three and six months ended March 31, 2022, Ashland completed a sale of excess land. The net book value of the land was $4 million as of September 30, 2021. Ashland received net proceeds of approximately $11 million and recorded a pre-tax gain of $7 million within the Income (loss) on acquisitions and divestitures, net caption of the Statements of Consolidated Comprehensive Income (Loss) for the three and six months ended March 31, 2022. Held for sale classification The assets and liabilities of the Performance Adhesives segment, along with other properties, have been reflected as assets and liabilities held for sale as described above. As a result, in accordance with U.S. GAAP standards, depreciation and amortization were not being recorded within the Statements of Consolidated Comprehensive Income (Loss) and the Condensed Consolidated Balance Sheets. These assets and liabilities are comprised of the following components:
|  | March 31 |  |  | September 30 |
(In millions) |  | 2022 |  |  | 2021 |
Accounts receivable, net |  | $ | — |  |  | $ | 26 |
Inventories |  |  | — |  |  |  | 27 |
Net property, plant and equipment |  |  | 4 |  |  |  | 80 |
Goodwill |  |  | — |  |  |  | 453 |
Operating lease assets, net |  |  | — |  |  |  | 10 |
Other assets |  |  | — |  |  |  | 1 |
Current assets held for sale |  | $ | 4 |  |  | $ | 597 |
Trade and other payables |  | $ | — |  |  | $ | 33 |
Accrued expenses and other liabilities |  |  | — |  |  |  | 7 |
Current operating lease obligations |  |  | — |  |  |  | 1 |
Operating lease obligations |  |  | — |  |  |  | 9 |
Current liabilities held for sale |  | $ | — |  |  | $ | 50 |

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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 Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: 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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