Acquisitions

Operating results of acquisitions are included in the Company’s financial statements from the date of acquisition.

Fiscal Year 2016 acquisitions

During the year ended December 31, 2016, the Company acquired a 90% interest in Harvest Innovations, an industry leader in minimally processed, expeller-pressed soy proteins, oils, and gluten-free ingredients; a 50% interest in Cairo-based Medsofts Group, a joint venture that owns and manages merchandising and supply chain operations; Caterina Foods, a leading toll manufacturer of specialty gluten-free and high-protein pastas; and a Casablanca, Morocco-based corn wet mill that produces glucose and native starch for an aggregate cost of $141 million in cash. The aggregate purchase price of these acquisitions, net of cash acquired of $11 million, was preliminarily allocated to working capital, property, plant, and equipment, goodwill, other intangible assets, other long-term assets, other long-term liabilities, and redeemable noncontrolling interest for $15 million, $23 million, $72 million, $41 million, $34 million, $17 million, and $38 million, respectively.

The remaining 10% interest in Harvest Innovations is recorded in other long-term liabilities and accounted for as a mandatorily redeemable interest which the Company has agreed to acquire following two years of operations.

The Company has an option three years from the date of acquisition to acquire the remaining 50% interest in Medsofts Group based on a fixed multiple of earnings before taxes, interest, and depreciation and amortization for the last twelve months of this three-year period. If the Company does not elect to exercise its option, the noncontrolling interest holder has the option to put the 50% interest to the Company on similar, though discounted, terms. The Company records the 50% remaining interest in temporary equity - redeemable noncontrolling interest.

Fiscal Year 2015 acquisitions

On November 2, 2015, the Company completed the acquisition of the remaining 50 percent interest in Eaststarch C.V. The acquisition includes corn wet mills in Bulgaria and Turkey and a 50 percent stake in a wet mill in Hungary enhancing the Company’s capabilities to serve customers around the world. The 2015 post acquisition financial results of Eaststarch C.V. are reported in the Corn Processing segment.

During the year ended December 31, 2015, the Company acquired four businesses, including the remaining interest in Eaststarch C.V. described above, for a total cost of $508 million. The purchase price, net of cash acquired of $29 million, plus the acquisition-date fair values of the Company’s previously held equity interests of $385 million in Eaststarch C.V. and $64 million in North Star Shipping and Minmetal included in Others below, were preliminarily allocated as follows:



(In millions)	Eaststarch C.V.			Others			Total
Trade receivables	$	27		$	25		$	52
Inventories	47			15			62
Other current assets	24			6			30
Investments in and advances to affiliates	193			—			193
Goodwill	132			119			251
Other intangible assets	166			161			327
Property, plant, and equipment	126			73			199
Other assets	—			15			15
Trade payables	(16		)	(13		)	(29		)
Accrued expense and other payables	(24		)	(13		)	(37		)
Long-term debt	—			(43		)	(43		)
Deferred income taxes	(32		)	(38		)	(70		)
Other liabilities	(22		)	—			(22		)
Total purchase price, net of cash acquired, plus acquisition date fair values of previously held equity interests	$	621		$	307		$	928

In the year ended December 31, 2015, the Company recognized pre-tax gains of $185 million on the Eaststarch C.V. transaction and $27 million on the North Star Shipping and Minmetal transaction included in Others above, representing the difference between the carrying values and acquisition-date fair values of the Company’s previously held equity interests. The acquisition date fair value was determined based on a discounted cash flow analysis using market participant assumptions (a Level 3 measurement under applicable accounting standards).

Goodwill recorded in connection with the acquisitions is primarily attributable to the synergies expected to arise after the Company’s acquisition of the businesses.

The following table sets forth the preliminary fair values and weighted average useful lives of the other intangible assets acquired.



	Weighted Average
	Useful Life	Eaststarch C.V.		Others		Total
	(In years)	(In millions)
Intangible assets with indefinite lives:
Trademarks/brands		$	—	$	5	$	5
Intangible assets with finite lives:
Land rights	33	—		122		122
Customer lists	15	166		31		197
Recipes and other	5	—		3		3
Total other intangible assets acquired		$	166	$	161	$	327

The Company’s consolidated statement of earnings for the year ended December 31, 2015 includes the post acquisition results of the acquired businesses which were immaterial.

The 2016 finalization of the purchase price allocation related to the acquisition of Eaststarch C.V. resulted in increases in goodwill and other intangibles of $38 million and $4 million, respectively, with a corresponding decrease in other long-term liabilities. The finalization of the purchase price allocations related to the other acquisitions did not result in material adjustments in 2016.

Fiscal Year 2014 acquisitions

On October 1, 2014 and November 18, 2014, the Company completed the acquisitions of the WILD Flavors businesses (Wild Flavors) and Specialty Commodities Inc. (SCI), respectively. Both acquisitions are in line with the Company’s strategy to increase returns and reduce earnings volatility through the growth of its specialty ingredient offerings. The 2014 post acquisition financial results of Wild Flavors and SCI are reported in the Wild Flavors and Specialty Ingredients segment.

During the year ended December 31, 2014, the Company acquired six businesses, including Wild Flavors and SCI, for a total cost of $3.0 billion. The purchase price net of cash acquired of $280 million was preliminarily allocated as follows:



(In millions)	Wild Flavors			SCI			Others			Total
Trade receivables	$	176		$	48		$	8		$	232
Inventories	286			72			25			383
Other current assets	64			2			—			66
Goodwill	1,698			59			15			1,772
Other intangible assets	1,103			46			35			1,184
Property, plant, and equipment	423			10			30			463
Other assets	68			6			—			74
Short-term debt	(215		)	—			(1		)	(216		)
Trade payables	(128		)	(25		)	(1		)	(154		)
Accrued expenses and other payables	(214		)	(14		)	(10		)	(238		)
Long-term debt	(238		)	—			(3		)	(241		)
Deferred income taxes	(378		)	(16		)	—			(394		)
Other liabilities	(173		)	—			—			(173		)
Total purchase price, net of cash acquired	$	2,472		$	188		$	98		$	2,758

Goodwill recorded in connection with the acquisitions is primarily attributable to the synergies expected to arise after the Company’s acquisition of the businesses. Of the $1.8 billion preliminarily allocated to goodwill, $15 million is expected to be deductible for tax purposes.

The following table sets forth the preliminary fair values and weighted average useful lives of the other intangible assets acquired.



	Weighted Average
	Useful Life	Wild Flavors		SCI		Others		Total
	(In years)	(In millions)
Intangible assets with indefinite lives:
Trademarks/brands		$	238	$	—	$	12	$	250
Intangible assets with finite lives:
Patents	15	—		3		—		3
Customer lists	15	552		36		21		609
Recipes and other	15	313		7		2		322
Total other intangible assets acquired		$	1,103	$	46	$	35	$	1,184

The Company’s consolidated statement of earnings for the year ended December 31, 2014 includes the post acquisition results of Wild Flavors which were immaterial.

The 2015 finalization of the purchase price allocation related to the acquisition of Wild Flavors resulted in an increase in goodwill of $123 million with corresponding decreases in other intangibles and other long-term liabilities. The finalization of the purchase price allocations related to the other acquisitions did not result in material adjustments in 2015.