Note 15: Acquisitions

for the six months ended September 30, 2009

 
September 30
2009
 
Rm
MWEB Africa Limited and MWEB Namibia (Proprietary) Limited
Telkom International (Proprietary) Limited, a wholly owned subsidiary of Telkom SA Limited, acquired 100% of MWEB Africa Limited from Multichoice Africa Limited, and 75% of MWEB Namibia (Proprietary) Limited from MIH Holdings Limited effective April 21, 2009. Both Multichoice Africa Limited and MIH Holdings Limited are members of the Naspers Limited Group  
The acquisition of MWEB is part of the Group's strategy of growing its broadband and solidifying its market position through acquisitions.  
The goodwill from the acquisition is partially attributable to the following:
  • Certain licences that could not be valued separately from the MWEB group, but contribute signifi cantly to goodwill as the MWEB business would cease to exist without the licence rights.
  • The skills and technical talent of the acquired business's workforce, and the synergies expected to be achieved from integrating the acquiree into the Group's existing internet service provision.
The goodwill is also attributable to the MWEB Group's position as Africa's largest satellite-based internet service provider in Sub-Saharan Africa.
The purchase price paid by Telkom International was USD55 million determined as follows:
  • Certain licences that could not be valued separately from the MWEB group, but contribute signifi cantly to goodwill as the MWEB business would cease to exist without the licence rights.
  • The skills and technical talent of the acquired business's workforce, and the synergies expected to be achieved from integrating the acquiree into the Group's existing internet service provision.
  
The fair value of the assets and liabilities acquired were determined as follows:  
Net assets acquired 94
Fair value of intangible assets 83
Deferred tax on intangible assets (20)
Fair value of net assets 157
Goodwill on acquisition 28
Purchase price for net asset fair value 185
Acquisition of loans receivable 312
Purchase price 497