On May 13, 2007, Merck and Mylan Inc., Canonsburg, PA (USA), entered into an agreement concerning the sale of the Generics business. The business was transferred to the acquirer with the closing on October 2, 2007.
The gain on the disposal pursuant to this agreement is combined with the result of this activity in accordance with IFRS 5 up until the closing date under profit/loss from discontinued operations.
The presentation of the previous year’s figures in the income statement and the segment reporting was adjusted accordingly.
Within the scope of the agreement, an option to purchase the Generics business remaining with the Merck Group after the transfer was granted to Mylan Inc. This option was already reflected in the purchase price. This remaining part of the Generics division is likewise reported as a discontinued operation within the meaning of IFRS 5. The relevant assets and liabilities are classified and reported as “held for sale”.
The reported profit/loss from discontinued operations comprises the following:
| [ XLS ] |
€ million |
2007 |
2006 |
Total revenues |
1,394.5 |
1,824.0 |
Cost of sales |
–737.7 |
–924.9 |
Marketing and selling expenses |
–271.9 |
–339.6 |
Administration expenses |
–66.0 |
–88.1 |
Other operating income and expenses |
–34.9 |
–32.4 |
Research and development costs |
–95.3 |
–132.2 |
Operating result |
188.7 |
306.8 |
|
|
|
Exceptional items |
3,561.5 |
–13.2 |
Earnings before interest and tax (EBIT) |
3,750.2 |
293.6 |
|
|
|
Financial result |
10.1 |
–2.4 |
Profit before tax |
3,760.3 |
291.2 |
|
|
|
Taxes on income |
–168.3 |
–96.3 |
Profit after tax |
3,592.0 |
194.9 |
|
|
|
Reversal of depreciation in accordance with IFRS 5 |
16.0 |
– |
Profit after tax in accordance with IFRS 5 |
3,608.0 |
194.9 |
|
|
|
thereof: |
|
|
Profit before tax of current business |
207.2 |
291.2 |
Taxes on income |
–70.1 |
–96.3 |
Profit after tax of current business |
137.1 |
194.9 |
|
|
|
Gain on disposal before tax |
3,569.1 |
– |
Taxes on income |
–98.2 |
– |
Gain on disposal after tax |
3,470.9 |
– |
The following consolidated assets and liabilities were disposed of within the scope of the sale:
| [ XLS ] |
€ million |
|
Cash and cash equivalents |
98.0 |
Inventories |
349.5 |
Other current assets |
441.0 |
Goodwill |
357.4 |
Other intangible assets |
65.7 |
Property, plant and equipment |
212.3 |
Other non-current assets |
91.2 |
Assets |
1,615.1 |
|
|
Current liabilities |
492.1 |
Non-current liabilities |
141.0 |
Equity and liabilities |
633.1 |
Assets and liabilities held for sale within the scope of the purchase option granted to Mylan Inc. are as follows:
| [ XLS ] |
€ million |
Dec. 31, 2007 |
Inventories |
11.3 |
Receivables and other assets |
15.6 |
Assets held for sale |
26.9 |
|
|
Liabilities |
7.4 |
Provisions |
0.6 |
Liabilities held for sale |
8.0 |