Haus of Deal Logo
Module V· Non-Controlling Interest (NCI) in M&AIntermediate
Question

Example: 80% acquisition of Bristol for 120, financed 50% debt and 50% equity. How do combined balance sheet and goodwill look?

Answer

The buyer pays 120 for 80%, implying 100% equity value of 150 if NCI is measured at fair value. Sources are 60 new debt and 60 new equity. The combined balance sheet adds target assets and liabilities at fair value, records NCI of 30 for the 20% not owned, and records goodwill as consideration 120 plus NCI 30 minus fair value of identifiable net assets. Exact goodwill depends on Bristol's fair-value net assets.

← PreviousHow do the two IFRS 3 NCI measurement methods differ, and what is standard under US GAAP?Next →How do you model the NCI line over the forecast period? Base walk with example.
Back to M&A Accounting