Companies consolidated

The consolidated financial statements of the LANXESS Group include the parent company LANXESS AG and all domestic and foreign affiliates.

 
 
  EMEA (excl. Germany) Germany North America Latin America Asia-Pacific Total
             
Fully consolidated companies
(incl. parent company)
           
Jan. 1, 2013 22 13 5 6 18 64
Additions 1       2 3
Subtractions   (1)       (1)
Mergers       (1)   (1)
Reclassification from non-consolidated companies 1         1
Reclassification to non-consolidated companies (1)         (1)
Dec. 31, 2013 23 12 5 5 20 65
             
Consolidated associates and joint ventures            
Jan. 1, 2013   1     2 3
Additions   1       1
Subtractions         (2) (2)
Changes in scope of consolidation           0
Dec. 31, 2013 0 2 0 0 0 2
             
Non-consolidated companies            
Jan. 1, 2013 2 2 1 3 1 9
Additions         1 1
Subtractions           0
Reclassification from consolidated companies 1         1
Reclassification to consolidated companies (1)         (1)
Dec. 31, 2013 2 2 1 3 2 10
             
Total            
Jan. 1, 2013 24 16 6 9 21 76
Additions 1       2 3
Subtractions         (1) (1)
Mergers       (1)   (1)
Changes in scope of consolidation 0         0
Dec. 31, 2013 25 16 6 8 22 77
 

Also consolidated are two special purpose entities in the EMEA (excluding Germany) region.

On April 5, 2013, LANXESS acquired all of the shares of Singapore-based PCTS Specialty Chemicals Pte. Ltd. First-time inclusion in the consolidated financial statements was effected from that date. The acquisition was funded from existing liquidity of the LANXESS Group. The company was assigned to the Material Protection Products business unit in the Performance Chemicals segment. The acquisition mainly strengthens LANXESS’s portfolio of biocides for paints and coatings.

The acquisition was accounted for as a business combination pursuant to IFRS 3. Thus, in allocating the purchase price, the acquiree’s identifiable assets, liabilities and contingent liabilities were included at fair value. The purchase price allocation was carried out in light of the information available at and immediately after the date of acquisition. According to IFRS, it can be adjusted within one year after the date of acquisition to reflect new information and findings.

The goodwill of €2 million resulting from the acquisition reflects, in particular, additional sales opportunities to existing and new customers, primarily in the Asian market.

The following table shows the effects of the acquisition on the Group’s financial position.

Additions from the Acquisition of PCTS
 
€ million IFRS carrying
amounts prior
to first-time
consolidation
Purchase
price
allocation
Carrying
amounts upon
first-time
consolidation
       
Intangible assets 0 6 6
Property, plant and equipment 0 5 5
Other assets 7 0 7
Total assets 7 11 18
       
Non-current liabilities 0 1 1
Current liabilities 1 0 1
Total liabilities 1 1 2
Net acquired assets (excluding goodwill) 6 10 16
       
Acquisition costs     18
Acquired goodwill (provisional)     2
 

On September 14, 2013, LANXESS acquired the phosphorus chemicals portfolio of Thermphos France S.A.R.L., Epierre, France, by way of an asset deal. The acquired activities were assigned to the Functional Chemicals business unit in the Performance Chemicals segment.

The acquisition was accounted for as a business combination pursuant to IFRS 3. Thus, in allocating the purchase price, the acquiree’s identifiable assets, liabilities and contingent liabilities were included at fair value. This transaction principally comprised property, plant and equipment with a fair value of €4 million at the acquisition date. Further, non-current liabilities of €2 million were assumed. The acquisition was funded from existing liquidity of the LANXESS Group. The Dutch parent company of Thermphos France was insolvent at the date of acquisition. The purchase price agreed upon in the negotiations was below the fair value of the net assets. The resulting gain of €2 million was recognized in other operating income. The purchase price allocation is provisional and was carried out with the aid of reports from external experts and in light of the information available at and immediately after the acquisition date. According to IFRS, it can be adjusted within one year after the date of acquisition to reflect new information and findings.

The acquisitions made in 2013 did not have a material impact on Group sales or earnings, nor would they have had if the business had already been consolidated from January 2013.

Tire Curing Bladders, LLC, Little Rock, United States, which was acquired in the previous year, was consolidated for the first time as of March 14, 2012. The first-time consolidation of Bond-Laminates GmbH, Brilon, Germany, was effected from September 12, 2012. The provisional purchase price allocations made with respect to these transactions were not adjusted in light of any new information or knowledge within twelve months from the respective acquisition dates and are therefore final.

Due to the transfer of control to LANXESS AG, the investment in LANXESS-TSRC (Nantong) Chemical Industrial Co., Ltd., Nantong, China, has no longer been accounted for using the equity method since the first quarter of 2013. Instead, the company was fully consolidated for the first time as a subsidiary. LANXESS AG’s ability to determine key elements of financial and business policy is derived from the shareholder agreement. The transition to full consolidation had no effect on earnings. Upon the first-time full consolidation, the 50% equity attributable to non-controlling interests was included at its pro-rata share of the fair value of the fully consolidated company’s net assets.

The company OOO LANXESS Lipetsk, Lipetsk, Russia, was consolidated for the first time. This had no material impact on the LANXESS Group’s financial position or results of operations.

Starting in the third quarter of 2013, the investment in DuBay Polymer GmbH, Hamm, Germany, was no longer fully consolidated due to the LANXESS Group’s loss of control but accounted for as a joint venture instead. Joint control exists in this case because the strategic financial and operational decisions regarding the business activity require the unanimous consent of the parties sharing control. It was accounted for by proportionate consolidation because this best reflects the economic substance and circumstances of the arrangement. The change to the latter method had no effect on earnings.

LANXESS’s interest in the earnings, assets and liabilities of DuBay Polymer GmbH in 2013 are presented in the table:

Earnings of DuBay Polymer GmbH
 
€ million 2013
   
Sales 10
Operating result (EBIT) 4
Income after income taxes 2
 
   
   
Assets and Liabilities of DuBay Polymer GmbH
 
€ million Dec. 31, 2013
   
Non-current assets 20
Current assets 4
Total assets 24
   
Non-current liabilities 4
Current liabilities 3
Total liabilities 7
 

Other information on companies consolidated

The following table lists the affiliated companies pursuant to Section 313, Paragraph 2 of the German Commercial Code:

Company Name and Domicile
 
%  Interest held
   
Fully consolidated companies
   
Germany  
LANXESS AG, Cologne
Aliseca GmbH, Leverkusen 100
Bond-Laminates GmbH, Brilon 100
IAB Ionenaustauscher GmbH Bitterfeld, Greppin 100
LANXESS Accounting GmbH, Cologne 100
LANXESS Buna GmbH, Marl 100
LANXESS Deutschland GmbH, Cologne 100
LANXESS Distribution GmbH, Leverkusen 100
LANXESS International Holding GmbH, Cologne 100
Perlon-Monofil GmbH, Dormagen 100
Rhein Chemie Rheinau GmbH, Mannheim 100
Saltigo GmbH, Leverkusen 100
   
EMEA (excluding Germany)  
Europigments, S.L., Barcelona, Spain 52
LANXESS (Pty.) Ltd., Modderfontein, South Africa 100
LANXESS Central Eastern Europe s.r.o., Bratislava, Slovakia 100
LANXESS Chemicals, S.L., Barcelona, Spain 100
LANXESS CISA (Pty.) Ltd., Newcastle, South Africa 100
LANXESS Chrome Mining (Pty.) Ltd., Modderfontein, South Africa 100
LANXESS Elastomères S.A.S., Lillebonne, France 100
LANXESS Elastomers B.V., Sittard-Geleen, Netherlands 100
LANXESS Emulsion Rubber S.A.S., La Wantzenau, France 100
LANXESS Epierre SAS, Epierre, France 100
LANXESS Finance B.V., Sittard-Geleen, Netherlands 100
LANXESS Holding Hispania, S.L., Barcelona, Spain 100
LANXESS International SA, Granges-Paccot, Switzerland 100
LANXESS Kimya Ticaret Limited Şirketi, Istanbul, Turkey 100
LANXESS Limited, Newbury, U.K. 100
LANXESS N.V., Antwerp, Belgium 100
LANXESS Rubber N.V., Zwijndrecht, Belgium 100
LANXESS S.A.S., Courbevoie, France 100
LANXESS S.r.l., Milan, Italy 100
OOO LANXESS, Moscow, Russia 100
OOO LANXESS Lipetsk, Lipetsk, Russia 100
Sybron Chemical Industries Nederland B.V., Ede, Netherlands 100
Sybron Chemicals International Holdings Ltd., Newbury, U.K. 100
   
North America  
LANXESS Corporation, Pittsburgh, U.S.A. 100
LANXESS Inc., Sarnia, Canada 100
LANXESS Sybron Chemicals Inc., Birmingham, U.S.A. 100
Rhein Chemie Corporation, Chardon, U.S.A. 100
Sybron Chemical Holdings Inc., Wilmington, U.S.A. 100
   
Latin America  
LANXESS Elastômeros do Brasil S.A., Rio de Janeiro, Brazil 100
LANXESS Industria de Produtos Quimicos e Plasticos Ltda., São Paulo, Brazil 100
LANXESS S.A. de C.V., Mexico City, Mexico 100
LANXESS S.A., Buenos Aires, Argentina 100
Rhein Chemie Uruguay S.A., Colonia, Uruguay 100
   
Asia-Pacific  
LANXESS Elastomers Trading (Shanghai) Co., Ltd., Shanghai, China 100
LANXESS (Changzhou) Co., Ltd., Changzhou, China 100
LANXESS (Liyang) Polyols Co., Ltd., Liyang, China 100
LANXESS (Ningbo) Pigments Co., Ltd., Ningbo City, China 100
LANXESS Butyl Pte. Ltd., Singapore 100
LANXESS Chemical (China) Co., Ltd., Shanghai, China 100
LANXESS Hong Kong Limited, Hong Kong, China 100
LANXESS India Private Ltd., Thane, India 100
LANXESS K.K., Tokyo, Japan 100
LANXESS Korea Limited, Seoul, South Korea 100
LANXESS Pte. Ltd., Singapore 100
LANXESS PTY Ltd., Homebush Bay, Australia 100
LANXESS Shanghai Pigments Co., Ltd., Shanghai, China 100
LANXESS Specialty Chemicals Co., Ltd., Shanghai, China 100
LANXESS-TSRC (Nantong) Chemical Industrial Co., Ltd., Nantong, China 50
LANXESS (Wuxi) Chemical Co., Ltd., Wuxi, China 100
Nexachem Trading (Qingdao) Co., Ltd., Qingdao, China 100
PCTS Specialty Chemicals Pte. Ltd., Singapore 100
Rhein Chemie Japan Ltd., Tokyo, Japan 100
Rhein Chemie (Qingdao) Co., Ltd., Qingdao, China 90
   
Joint ventures
   
Germany  
DuBay Polymer GmbH, Hamm 50
   
Associates accounted for using the equity method
   
Germany  
Currenta GmbH & Co. OHG, Leverkusen 40
   
Consolidated special purpose entities
   
EMEA (excluding Germany)  
Dirlem (Pty) Ltd., Modderfontein, South Africa 49
Rustenburg Chrome Employees Empowerment Trust, Modderfontein, South Africa 0
   
Non-consolidated immaterial subsidiaries
   
Germany  
LANXESS Middle East GmbH, Cologne 100
Vierte LXS GmbH, Leverkusen 100
   
EMEA (excluding Germany)  
LANXESS Mining (Proprietary) Ltd., Modderfontein, South Africa 100
W. Hawley & Son Ltd., Newbury, U.K. 100
   
North America  
LANXESS Energy LLC, Wilmington, U.S.A. 100
   
Latin America  
Comercial Andinas Ltda., Santiago, Chile 100
Petroflex Trading S.A., Montevideo, Uruguay 100
   
Asia-Pacific  
Bond-Laminates HK Limited, Hong Kong, China 100
PCTS Specialty Chemicals Malaysia (M) Sdn. Bhd., Kuala Lumpur, Malaysia 100
   
Other non-consolidated immaterial companies
   
Latin America  
Hidrax Ltda., Taboão da Serra, Brazil 39