Loss of Control of a Biosimilar Joint Venture and Remeasurement at Fair Value

Samsung BioLogics recognized a big valuation gain when it lost control over a biosimilar joint venture. The investment community expressed concerns about the revaluation gain because the loss of control of the joint venture was attributable to potential voting rights held by the joint venture partner and Samsung BioLogics had incentives to present higher profitability prior to IPO. We suggest the following: (1) timely and full disclosure of the potential voting rights; (2) extensive disclosure about the fair value estimate; (3) a conservative recognition of valuation gains; and (4) a periodic assessment of potential impairment of fair value estimates.

Nurturing a talent pipeline

Vet nurse Rachel Smith, who is a joint venture partner with Vets4Pets, has created a talent pipeline to develop her practices’ staff and help with long-term recruitment.

Heineken's Acquisition of Asia Pacific Breweries: Accounting for Business Combinations and Changes in Ownership Interests

ABSTRACT On July 20, 2012, Heineken, a Dutch brewery offered S$5.125 billion (Singapore dollars; approximately US$4.1 billion) to buy Asia Pacific Breweries Ltd (APB; formerly, Malayan Breweries Limited) from its Singapore-based joint venture partner, Fraser and Neave, Limited. (F&N). At that point, Heineken and F&N had joint control over APB through the joint venture vehicle Asia Pacific Investments Pte Ltd (APIPL). Brewery business under the joint arrangement had moved on quite predictably from the time APB was formed in 1931. However, the calm changed to high drama when Thai Beverage, owned by one of Thailand's tycoons, made a bid for F&N and APB. Heineken was quick to respond by aggressively buying shares of APB, leading to a large control premium being paid in the final offer price. The bidding war was largely motivated by the Dutch and Thai beer giants, each wanting to own the iconic Tiger beer brand that was owned by APB and thus take control of APB's strong market share in the fast-growing market of Asia. The Heineken bid for APB presents an interesting case study regarding the motivations for acquisitions, the nature of control, and accounting for acquisitions. The case also presents rich issues in accounting for changes in ownership interests with and without gain of control.

1MDB: The Audit Firms’ Questions

The 1Malaysia Development Berhad (1MDB) has had three auditors since it started its operation several years ago. The issues of interest are related to the subject matter of auditor switching and the audit failure allegations made against its two latter auditors: KPMG and Deloitte. When it concerns Deloitte, it was accused of hiding 1MDB’s insolvency. As for the KPMG, it was accused of failing to expose the allegedly suspicious transactions between 1MDB and its joint venture partner Petrosaudi International Limited (PSI) to the relevant authorities. As for the auditor switching from KPMG to Deloitte, questions arose on the reasons for and its timing.

Fragmented Liberalization in the Chinese Automotive Industry: The Political Logic behind Beijing Hyundai's Success in the Chinese Market

This paper explains the extraordinary rise of the Beijing Hyundai Motor Company (BHMC), a joint venture between a state-owned enterprise run by the Beijing municipal government and Hyundai Motor Company. Within the span of three years, the BHMC soared to become China's second-ranked automotive manufacturer in terms of units sold. I highlight the role of the Beijing municipal government in creating favourable market conditions for the BHMC during its initial operation phase (2002–2005). The Beijing municipal government selectively adopted protectionist measures and liberalizing measures to promote its locally based company. I characterize this practice asfragmented liberalization,a system through which sub-national governments discriminately apply WTO or central government regulations to promote their local joint venture partner. In so doing, I also challenge the existing assumption that multinational companies are the drivers of economic liberalization, by showing Hyundai's support for local protectionism and industrial policy at the sub-national level.

Implications of Enercon India v. Aloys Wobben for Technology Theft in India?

On 2December 2010, in the case Enercon India v. Aloys Wobben the Intellectual Property Appellate Board (“IPAB”) at Chennai invalidated 12 of AloysWobben’s patents in India. The case received a lot of criticism in Germany and the IPAB was soon accused of bias and “technology theft”. The case, which is set in the energy sector but could very well be placed in the technology sector, deals with extremely interesting questions regarding intellectual property law and how a foreign company can operate and exit a joint venture with an Indian partner. At the heart of the matter are questions regarding Indian patent law, Indian civil procedure law and how a German company should act as a joint venture partner in India (and what it should not do). This article will initially analyze the decision of the IPAB and why the parties ended up in the legal dispute before the IPAB. Itwill then go on to examinewhether in fact there was a bias involved and will close with a general remark on joint ventures between German and Indian (technology) firms.