ACQUISITION

On March 15, 2012, the Company acquired 80% of the outstanding capital stock of Nutricion para el Conosur S.A. which manufactures, distributes and sells infant formula and children’s nutrition products in Argentina under the SanCor Bebé and Bebé Plus brands. The acquisition combined the product portfolio, research and development, and marketing expertise of the Company with the manufacturing, distribution and local market knowledge of the noncontrolling interest owner. The primary reason for this acquisition was to build the Company’s global business by broadening and strengthening the Company’s country portfolio in the high growth Latin America region. The purchase price was 850.7 million Argentine pesos (ARS), which equated to $195.8 million as of March 15, 2012, and consisted of cash (ARS473.1 million) and a note payable (ARS377.6 million). See Note 15 for a discussion of the note payable. The acquisition was accounted for as a business combination and the operating results of the acquired business were included in the consolidated financial statements from the acquisition date.

Tangible and identifiable intangible assets acquired and the noncontrolling interest were recorded at their estimated fair values. The fair value of the noncontrolling interest was derived from the purchase price then adjusted to remove the inherent control and marketability premiums. The excess of the consideration transferred over those fair values was recorded as goodwill. The factors that contributed to the recognition of goodwill primarily related to expected synergistic benefits and the expansion of the premium infant formula category in Argentina. The following table summarizes the allocation of the purchase price:



(in millions)	March 15, 2012
Cash	$	2.8
Other intangible assets
Trademark, indefinite life	51.1
Non-compete agreement, indefinite life	10.1
Distributor-customer relationships, 10 year life	4.9
Total identifiable assets	68.9
Goodwill, non-tax deductible	172.8
Deferred tax liability	(15.7		)
Net assets acquired	226.0
Less: noncontrolling interest	(30.2		)
Total consideration transferred	$	195.8

Under the terms of an agreement related to the acquisition, the noncontrolling interest owner has the right to require MJN to either (1) purchase (the “Put Right”) its remaining 20% noncontrolling interest or (2) sell to it (the “Call Right”) up to an additional 20% of the outstanding capital stock of Nutricion para el Conosur S.A. The Put Right is exercisable from September 15, 2015 to September 15, 2018 and the decision to exercise is not within the control of MJN. If exercised, the price paid will be determined based on established multiples of sales and earnings of the acquired business and is currently estimated to equate to fair value at the earliest exercise date. As a result of the Put Right, the noncontrolling interest is presented as redeemable noncontrolling interest outside of equity on the balance sheet. Accretion to the redemption value of the Put Right will be recognized through equity using an interest method over the period from March 15, 2012 to September 15, 2015.