On July 26, 2019, the company acquired 100 percent of the voting equity interest of the AxleTech group companies for approximately $179 million in cash, subject to certain purchase price adjustments. The company funded the acquisition with the term loan under the revolving credit agreement (see Note 18). The AxleTech acquisition was accounted for as a business combination.

The addition of AxleTech enhances Meritor’s growth platform with the addition of a complementary product portfolio that includes a full line of independent suspensions, axles, braking solutions and drivetrain components across the off-highway, defense, specialty and aftermarket markets. AxleTech operates within Meritor’s Aftermarket, Industrial and Trailer segment.

Pro forma financial information of the company is presented in the following table for the years ended September 30, 2019 and 2018 as if the AxleTech acquisition had occurred on October 1, 2017. The pro forma financial information is unaudited and is provided for informational purposes only and does not purport to be indicative of the results which would have actually been attained had the acquisition occurred on October 1, 2017 (in millions).



	Pro Forma Combined
	Year Ended September 30,
	2019		2018
	(Unaudited)
Sales	$	4,590	$	4,413
Net income attributable to Meritor, Inc. ⁽¹⁾	$	360	$	121

The purchase price was allocated on a provisional basis as of July 26, 2019. Assets acquired and liabilities assumed were recorded at estimated fair values based on management's estimates, available information, and reasonable and supportable assumptions. Additionally, the Company is utilizing a third-party to assist with certain estimates of fair values.The provisional purchase price allocation, which is subject to change and may be subsequently adjusted to reflect final valuation results and other adjustments, is shown below (in millions).



	July 26, 2019
Purchase price	$	179

Assets acquired and liabilities assumed
Cash	11
Receivables	37
Inventories	70
Identifiable intangible assets	46
Other assets	9
PP&E	26
Accounts payable	(33		)
Other liabilities	(48		)
Identifiable net assets acquired	118

Goodwill resulting from the acquisition of AxleTech	61
	$	179

The company recorded provisional goodwill in the amount of $61 million for the excess of consideration paid over the fair value of the individual assets acquired and liabilities assumed. This recorded goodwill consists largely of the synergies and economies of scale expected from combining the operations of the company and AxleTech. All of the goodwill was provisionally assigned to the Aftermarket, Industrial and Trailer reportable segment. The assignment of goodwill to reporting units is not complete. The company incurred acquisition related costs of $6 million as of September 30, 2019, which were recorded as incurred and have been classified as selling, general, and administrative expenses in the Consolidated Statement of Operations for the year ended September 30, 2019.

On April 30, 2018, the company acquired substantially all of the assets of AA Gear & Manufacturing, Inc. ("AAG") for a cash purchase price of approximately $35 million and the assumption of certain liabilities. AAG provides low-to-medium volume batch manufacturing for complex gear and shaft applications, as well as quick-turnaround prototyping solutions and emergency plant support. The AAG acquisition was accounted for as a business combination. Of the $35 million, $11 million was recorded in

On August 31, 2017, the company acquired certain assets of Fabco Holdings, Inc. ("FABCO"), including the product portfolio and related technologies, for a cash purchase price of $34 million and the assumption of certain liabilities. The Fabco acquisition was accounted for as a business combination.

As of September, 30, 2018, the company finalized all measurement period adjustments related to the Fabco acquisition. Since completion of initial estimates in the fourth quarter of fiscal year 2017, the company recorded a net $1 million measurement period adjustment to decrease the fair value of identifiable net assets acquired in the Fabco transaction, resulting in a corresponding $1 million increase to goodwill. These adjustment were made to reflect additional available information and updated valuation results, which included valuation of trademarks, technology and customer relationships. All goodwill resulting from the Fabco acquisition was assigned to the Aftermarket, Industrial and Trailer reportable segment (see Note 7).



		Estimated Fair Value
		As of September 30, 2017			Measurement Period Adjustments			As of September 30, 2018
Purchase price		$	34		$	—		$	34

Assets acquired and liabilities assumed
	Receivables	5			—			5
	Inventories	13			(1		)	12
	Property, plant and equipment	9			(2		)	7
	Intangible assets	—			3			3
	Accounts payable	(6		)	—			(6		)
	Other current liabilities	(6		)	(1		)	(7		)
Total identifiable net assets acquired		15			(1		)	14

Goodwill resulting from the acquisition of Fabco		19			1			20
		$	34		$	—		$	34

In the fourth quarter of fiscal year 2017, Meritor, Inc. closed on the sale of its interest in Meritor WABCO Vehicle Control Systems ("Meritor WABCO") to a subsidiary of its joint venture partner, WABCO Holdings Inc. The total purchase price for the sale was $250 million. The Company also received a final partnership distribution of $8 million in the fourth quarter of fiscal year 2017, immediately prior to closing.