Price allocation for tax purposes between the different majority shareholders as part of a disposal

Sector of activity: Industry
Size (sales in $m): 600

Context

  • The Group was considering the disposal of a large non-strategic division
  • The division was backed by several head holding companies to which the transaction price had to be allocated for tax purposes
  • The tax impact of this allocation was a key aspect of the disposal for our client

Our mission

  • Use of a multi-criteria approach to evaluate the various scopes supported by the division’s holding companies
  • Preparation of financial information (historic and forecast) within the scopes to be evaluated
  • Reconciliation analysis of financial data to validate the breakdown of forecasts between the various scopes
  • Analysis of standalone and carve-out costs post disposal

Results

  • Tax assessments and report writing for the tax authorities concerned
  • Our output was used by our client in their tax returns for the countries concerned

Key success factors

  • Support during the various stages of the transaction as a source of proposals to deal with issues relating to tax and high value-added evaluation
  • Impeccable grasp of tax issues in an international context (subsidiaries in over 20 countries) which allowed us to satisfy the demanding requirements of the tax authorities in the countries concerned
  • Ability to deal with complex accounting and evaluation issues related to the number of subsidiaries falling with the scope as well as the diverse nature of their activities