Business Combinations - Farfetch

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Farfetch Acquisition

On January 30, 2024 we completed the acquisition of Farfetch. We believe the acquisition will allow us to expand into luxury retail. We have accounted for this acquisition as a business combination. Total purchase consideration consisted of amounts previously funded to Farfetch under a loan prior to acquisition (the “Bridge Loan”) and required partial repayment of the Farfetch Term Loans at the close of the transaction.


(in millions)	Estimated Fair Value
Farfetch Term Loan repayment	$	58
Bridge Loan contribution	150
Total purchase consideration	$	208

Purchase Price Allocation

The following table summarizes the preliminary allocation of purchase consideration and the fair value of the assets acquired and liabilities assumed as of the acquisition date:


(in millions)	Estimated Fair Value
Assets acquired
Cash and cash equivalents	$	126
Accounts receivable, net	288
Inventories	310
Prepaids and other current assets	224
Property and equipment, net	95
Intangible assets	325
Operating lease right-of-use assets	209
Other non-current assets	227
Liabilities assumed
Accounts payable	(505)
Other current liabilities	(169)
Long-term debt	(557)
Operating lease obligations	(214)
Other non-current liabilities	(177)
Net assets assumed	182
Noncontrolling interests	(78)
Goodwill on acquisition	104
Total consideration	$	208

The excess of purchase consideration over the fair value of net identifiable assets acquired and liabilities assumed was recorded as goodwill which is not deductible for tax purposes. Goodwill represents the future economic benefits we expect to achieve as a

result of the acquisition, including the workforce of the acquired business as well as future operational and logistical cost efficiencies expected to be achieved. During 2024, certain insignificant measurement period adjustments were made to the initial allocation, and the preliminary amount of goodwill was increased by $35 million. Goodwill was recorded in our Developing Offerings segment.

The identifiable intangible assets acquired were as follows:


(in millions, except years)	Weighted Average Useful Life	Estimated Fair Value
Brand trademarks	5 years	$	130
Customer relationships	5 years	34
Supplier relationships	15 years	61
Developed technology	3 years	38
Brand licenses	8 years	62
Total intangible assets		$	325

The results of Farfetch included in our consolidated statement of operations since the closing of the acquisition were as follows:


(in millions)	2024
Total net revenues	$	1,658
Net loss	$	(352)

Acquisition-related costs were recorded as operating expenses for 2024 and were not material.

Supplemental Pro Forma Information (Unaudited)

The following financial information presents our results as if the acquisition of Farfetch had occurred on January 1, 2023:


(in millions)	2024		2023
Pro Forma Information
Total net revenues	$	30,455	$	26,712
Net (loss) income	$	(20)	$	965

These pro forma results are based on estimates and assumptions, which we believe are reasonable. They are illustrative only and are not the results that would have been achieved had the acquisition actually occurred on January 1, 2023, nor are they indicative of future results. The pro forma results include adjustments related to the business combination, including amortization of acquired intangibles, stock-based compensation, lease expense, and income taxes.

Redeemable Noncontrolling Interests

In December 2023, we established a subsidiary, Surpique LP (the “Limited Partnership”) for the purposes of providing the Bridge Loan and acquiring all of the business and assets of Farfetch. The Limited Partnership is owned 80.1% by Coupang, Inc and 19.9% by certain funds advised or managed by Greenoaks Capital Partners, LLC (“Greenoaks”), a related party. The Limited Partnership is included in the Company’s consolidated operating results as of 2024 and 2023.

Greenoaks’ 19.9% equity interest in the Limited Partnership is subject to a put/call option after the acquisition was completed, whereby their equity interest can be purchased at either parties’ option after seven years has elapsed and no initial public offering of the acquired Farfetch assets has taken place. The put/call option is to be calculated based on market value of the Farfetch business at the time of exercise. As of December 31, 2023, we recognized a redeemable noncontrolling interest of $15 million for Greenoaks’ equity interest in the Limited Partnership. During 2024, Greenoaks contributed a further $55 million in connection with the Bridge Loan and acquisition of Farfetch, which we recognized as additional redeemable noncontrolling interest. It is probable that the redeemable noncontrolling interest will be redeemed and we have elected to adjust the carrying value to its redemption value over a seven year period following the Farfetch acquisition. The redemption value is estimated at $100 million as of December 31, 2024.

Mr. Neil Mehta, a member of the Company’s Board of Directors, has served as a Managing Partner of Greenoaks since April 2012. Greenoaks and certain funds and accounts to which Greenoaks serves as the investment adviser and related persons or entities, including Mr. Mehta, have ownership in our Class A common stock.