Acquisitions, Dispositions and Plant Closures

Acquisitions


•	SO.F.TER. S.p.A.

On December 1, 2016, the Company acquired 100% of the stock of the Forli, Italy based SO.F.TER. S.p.A. ("SOFTER"), a leading thermoplastic compounder. The acquisition of SOFTER increases the Company's global engineered materials product platforms, extends the operational model, technical and industry solutions capabilities and expands project pipelines. The acquisition was accounted for as a business combination and the acquired operations are included in the Advanced Engineered Materials segment.

Pro forma financial information since the respective acquisition date has not been provided as the acquisition did not have a material impact on the Company's financial information. The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill (Note 2 and Note 11). The Company calculated the fair value of the assets acquired using the income, market, or cost approach (or a combination thereof). Fair values were determined based on Level 3 inputs (Note 2) including estimated future cash flows, discount rates, royalty rates, growth rates, sales projections, retention rates and terminal values, all of which require significant management judgment and are susceptible to change. The purchase price allocation is based upon preliminary information and is subject to change if additional information about the facts and circumstances that existed at the acquisition date becomes available. The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill. However, any subsequent measurement period adjustments are not expected to have a material impact on the Company's results of operations.

The preliminary purchase price allocation for the SOFTER acquisition is as follows:



	As of December 1, 2016
	(In $ millions)
Cash and cash equivalents	11
Trade receivables - third party and affiliates	53
Inventories	58
Property, plant and equipment, net	68
Intangible assets (Note 11)	79
Goodwill (Note 11)⁽¹⁾	106
Other assets⁽²⁾	33
Total fair value of assets acquired	408

Trade payables - third party and affiliates	(41	)
Total debt (Note 14)	(103	)
Deferred income taxes	(30	)
Other liabilities	(45	)
Total fair value of liabilities assumed	(219	)
Net assets acquired	189

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⁽¹⁾	Goodwill consists of expected revenue and operating synergies resulting from the acquisition. None of the goodwill is deductible for income tax purposes.


⁽²⁾	Includes a $23 million indemnity receivable for uncertain tax positions related to the acquisition.

Transaction related costs of $3 million were expensed as incurred to Selling, general and administrative expenses in the consolidated statements of operations. The amount of pro forma Net earnings (loss) of SOFTER included in the Company's consolidated statement of operations was approximately 2% (unaudited) of its consolidated Net earnings (loss) had the acquisition occurred as of the beginning of 2016. The amount of SOFTER Net earnings (loss) consolidated by the Company since the acquisition date was not material.


•	Cool Polymers

In October 2014, the Company completed the acquisition of substantially all of the assets of Cool Polymers, Inc., including CoolPoly^®, a portfolio of thermally conductive polymers for cash plus contingent consideration (Note 25), to support the strategic growth of the Company's engineered materials business. The acquired operations are included in the Company's Advanced Engineered Materials segment. Pro forma financial information since the respective acquisition date has not been provided as the acquisition did not have a material impact on the Company's financial information. The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill (Note 2).

Plant Closures


•	Lanaken, Belgium

In December 2015, the Company announced it had ceased 50% of its manufacturing operations at its acetate tow facility in Lanaken, Belgium. The exit costs related to the capacity reduction at its Lanaken facility are included in Other (charges) gains, net in the consolidated statements of operations (Note 18). The Lanaken, Belgium operations are included in the Company's Consumer Specialties segment.


•	Tarragona, Spain

In December 2015, the Company announced the sale of its conventional emulsions production facility. The Company was unable to find a credible buyer for the vinyl acetate ethylene ("VAE") emulsions facility, resulting in its closure. The Company completed the information and consultation process with employee representatives pursuant to which the Company ceased all manufacturing operations at the VAE emulsions facility. The exit costs, including long-lived asset impairment losses, related to the closure of the Tarragona VAE facility and the sale of the conventional facility are included in Other (charges) gains, net in the consolidated statements of operations (Note 18). The Tarragona, Spain operations are included in the Company's Industrial Specialties segment.


•	Meredosia, Illinois

In December 2015, the Company ceased operation of its VAE emulsions facility in Meredosia, Illinois. The exit costs, including long-lived asset impairment losses, related to the closure of the VAE facility are included in Other (charges) gains, net in the consolidated statements of operations (Note 18). The Meredosia, Illinois operations are included in the Company's Industrial Specialties segment.

During the year ended December 31, 2015, the Company also recorded $39 million in accelerated depreciation expense related to property, plant and equipment no longer in use at the Company's ethanol technology development unit in Clear Lake, Texas. The accelerated depreciation is included in Research and development expenses in the consolidated statements of operations and is included in the Company's Acetyl Intermediates segment.