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 and product offerings. 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 L for further details about the acquisition financing.

Additionally, the Company entered into forward contracts to partially mitigate its currency exchange rate risk associated with the dollar denominated cash portion of the purchase price. On March 29, 2018, the Company settled these contracts for 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	453
Other non-current assets	50
Short-term debt	(4		)
Accounts payable	(222		)
Accrued liabilities	(166		)
Long-term debt	(3		)
Postretirement and pension liabilities	(50		)
Other non-current liabilities	(351		)
Total identifiable net assets	$	2,364

Goodwill	$	1,548

The acquired property, plant and equipment will be depreciated over the estimated remaining useful lives on a straight-line basis.

The acquired intangible assets will be amortized over the estimated remaining useful lives of the intangible assets, 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 (in years)
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. Measurement period adjustments during the three month period ended September 30, 2018, primarily result to adjustment to Signode's deferred tax liabilities. The Company expects to finalize these amounts within one year of the acquisition date.

Signode is reported as the Company's Transit Packaging segment. The acquired goodwill was assigned to this segment and is not expected to be deductible for tax purposes.

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 $585 and $1,205 and net income attributable to Crown Holdings of $27 and $30 for the three and nine months ended September 30, 2018.

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 nine months ended September 30, 2017 for the fair value adjustment related to the sale of inventory acquired. Signode's results include foreign exchange losses related to pre-acquisition intercompany debt arrangements of $15 for the nine months ended September 30, 2018 and $14 and $38 for the three and nine months ended September 30, 2017.



	Three Months Ended		Nine Months Ended
	September 30		September 30
	2017		2018		2017
Pro forma net sales	$	3,033	$	9,005	$	8,196
Pro forma net income attributable to Crown Holdings	169		389		344
Earnings per common share attributable to Crown Holdings:
Basic	$	1.26	$	2.91	$	2.53
Diluted	$	1.26	$	2.91	$	2.52

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.