PROCEDIMENT I NORMES GENERALS
BASES GENERALS QUE HAN DE REGIR LA CON VOCATÒRIA DE CONCURSOS PER A LA PRO-
Under the terms of a three-year agreement dated 25 June 2009, Crédit Agricole S.A. and Assicurazioni Generali S.p.A., which together constitute Intesa Sanpaolo’s largest shareholder with approximately 11% of the share capital, have undertaken to coordinate the exercise of their voting rights with the aim of maximising the value of their investment.
At 31 December 2009, Crédit Agricole S.A. was Intesa Sanpaolo’s second largest shareholder with 5.8% of voting rights.
The standards applicable to the equity method (IAS 28) specify that an investor who holds, directly or indirectly, less than 20% of the voting rights in the detained company, has to clearly demonstrate to have a significant influence. Significant influence by an investor is usually evidenced in one or more of the following ways: (a) representation on the Board of Directors or equivalent governing body of the investee; (b) participation in policy-making processes, including participation in decisions about dividends or other distributions; (c) material transactions between the investor and the investee; (d) interchange of managerial personnel; or (e) provision of essential technical information.
Crédit Agricole S.A. and Assicurazioni Generali S.p.A. have agreed to consult each other before every meeting of Intesa Sanpaolo’s governing bodies (Management Board and Supervisory Board), on which only Assicurazioni Generali S.p.A. is represented. These consultations are designed to maximise the value of the investment for the two shareholders by agreeing on a common stance on issues of strategic interest (budget, financial and risk management policy, dividend distribution, capital increases, asset acquisitions or disposals, etc.), with the exception of certain areas relating to competition issues in Italy.
These arrangements give Crédit Agricole S.A. the power to participate in Intesa Sanpaolo’s financial and operating policies.
The arrangements will remain in effect until 19 March 2010 – after the closing date for Intesa Sanpaolo’s accounts – when Crédit Agricole S.A. and Assicurazioni Generali S.p.A. will terminate their agreement so that Crédit Agricole S.A. can submit its own list and have its own representative elected to the Supervisory Board at Intesa Sanpaolo’s next AGM, in April 2010.
This representative – who may not be either an Executive Officer or an employee of Crédit Agricole S.A. and whose appointment must be approved by the Antitrust Authority, will act in the name and on behalf of Crédit Agricole S.A., under the terms of a representation agreement and under the oversight of a Monitoring Trustee, in areas relating to competition matters. The Monitoring Trustee will also be mandated by Crédit Agricole S.A. to vote on its behalf at shareholders’ Meetings.
As Crédit Agricole S.A. has demonstrated that it holds significant influence over this entity, within the meaning of IAS 28, in its parent company financial statements, it has accounted for its interest in Intesa Sanpaolo by the equity method since 25 June 2009.
For information, at 31 December 2008, the after-tax unrealised loss amounted to €1.5 billion and was recognised through equity. At 31 December 2009, if Crédit Agricole S.A. had not demonstrated significant influence, as described above, its investment in Intesa Sanpaolo would have been recognised under “Available-for-sale securities” at market value, i.e. €2,220 million. The after-tax loss would have been €998 million, recognised directly through equity. There would have been an examination of criteria for determining whether a prolonged or significant decline in value had occurred, within the meaning of IAS 39, as explained in Note 1.1 to the financial statements; if these criteria had been met, Crédit Agricole would have recognised a prolonged impairment loss in the income statement.
Consequently, at 30 June 2009, the investment in Intesa Sanpaolo was classified under “Investments in affiliates” and therefore measured at its historical cost. This had the effect of increasing recyclable reserves by €1,482 million and reducing Crédit Agricole Group’s Tier One ratio by 4 bp.
In accordance with IAS 28, which refers to the provisions of IFRS 3 on accounting for the difference between the cost of an investment and the investor’s share of the net fair value of the assets and liabilities acquired, two separate investments have been identified:
a 5.12% interest in Intesa Sanpaolo resulting from Crédit Agricole S.A.’s historical investment in Banca Intesa. The change in the Group’s share of Intesa Sanpaolo’s net assets up to 25 June 2009 was recognised directly in consolidated reserves attributable to equity holders of Crédit Agricole S.A. in an amount of -€76 million (i.e. 5.12%);
a 0.43% interest in Intesa Sanpaolo purchased in the first quarter by Crédit Agricole S.A. Considering its purchase price, a €110 million negative goodwill was accounted in profit or loss. The change in the Group’s share of Intesa Sanpaolo’s net assets between 31 March and 25
At 31 December 2009, the market value of the Group’s interest is €2,220 million and the recoverable amount is €2,946 million. An impairment test comparing the recoverable amount (*) with the value under the equity method was carried out at 31 December 2009 and led to the recognition of a €379 million impairment loss under the line item “Share of net income of equity-accounted affiliates”.
At 31 December 2009, the share of net income of Intesa Sanpaolo was -€232 million. It comprises the impairment loss of -€379 million, negative goodwill of +€110 million and the +€37 million share of net income recognised following the publication of Intesa Sanpaolo’s financial statements for the period ended 30 September 2009.
(*) Recoverable amount is the higher of value between value in use and market value.
Acquisition of 35% of CACEIS giving the Group exclusive control with an
interest of 85%
On 30 June 2009, Crédit Agricole S.A. acquired a further 35% interest and voting rights in CACEIS from Natixis, for a total of €595 million including €495 million paid on 30 June 2009.
Crédit Agricole S.A. now owns 85% of CACEIS and therefore exercises exclusive control, whilst Natixis owns the remaining 15%.
This transaction resulted in a change of consolidation method: CACEIS, which was 50% proportionately consolidated until 30 June 2009, has been fully consolidated as from 1 July 2009. CACEIS contributed €93 million to the net income of the consolidated entity in respect of 2009.
The transaction has strengthened the Crédit Agricole S.A. Group’s position in issuer services. With approximately €2,200 billion in assets under custody and €1,000 billion in funds under administration, CACEIS ranks among the world leaders in these businesses.
On the acquisition date, the fair value of CACEIS’ assets and liabilities were determined on a provisional basis. In accordance with the definition of an intangible asset under IFRS 3, the goodwill recognised in the CACEIS sub-group has not been taken into account for calculating goodwill on the additional 35%:
Acquisition price €570 million
Transaction costs €11 million
Fair value of net assets acquired €297 million
Goodwill €284 million
The goodwill has been determined on a provisional basis and may be adjusted within twelve months of the acquisition date. It has been allocated to the “Issuer services” cash-generating unit.