Vetoquinol - Universal Registration Document - 2021

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements Vetoquinol Universal Registration Document 2020 Financial report 75 6 6.5.7 Business combinations 6.5.7.1 Business combinations completed in 2019 On April 15, 2019, Vetoquinol acquired Clarion Biociên- cias, a veterinary drug manufacturer based in Goiás state, Brazil. Founded in 1998, Clarion Biociencias develops, manufactures and distributes medicines and non-medicinal products mainly for the livestock market. Thanks to its location in the heart of Brazil’s cattle-bree- ding region, the firm is strongly positioned in this species segment, which represents over 50% of the Brazilian animal health market, as well as in internal and exter- nal parasiticides. Clarion Biociencias employs around 200 people including a 70-strong sales force. Thanks to this acquisition, the Vetoquinol Group is set to significantly strengthen its foothold in Brazil, the world’s third-largest animal health market. The purchase price allocation was complete as of December 31, 2020. Regarding the remaining shares (10% of the capital stock of Clarion), the Group entered into a cross-put/ call agreement with the minority shareholders with the intention of acquiring the entire capital stock by the end of 2022. This put/call option was valued at €4.1 million as of December 31, 2020. Clarion Biociencias Ltda was merged into Vetoquinol Saude Animal Ltda (Brazil) on March 29, 2020, forming the Vetoquinol Brazil CGU. Following this merger, the put/call option will be exercised for the remaining 0.2% of the merged company. €000 TOTAL Acquisition of majority stake in Clarion 51,978 Value of put/call option relating to the subsequent acquisition of Clarion shares 5,606 Value of identified assets and liabilities as of acquisition date 4,981 Currency differences (2,687) GOODWILL AT DEC 31, 2019 49,915 Value of acquired assets identified in 2020 21,136 Value of deferred tax identified in 2020 (698) Corrected value of identified assets as of acquisition date (243) Impairment (15,006) Currency differences (6,628) GOODWILL AT DEC 31, 2020 8,087 6.5.7.2 Reconciliation of purchase price with cash outflow as per the cash flow statement There were no business combinations in 2020. Therefore, there was no cash flow related to this type of transaction. Only 2019 movements appear in this note. €000 TOTAL Acquisition of majority stake in Clarion 51,978 Clarion liquid assets as of acquisition date 15 Currency difference between acquisition date exchange rate and average rate related to the Clarion acquisition (1,513) Additional payment relating to acquisition of VetComproducts 350 AMOUNT SHOWN IN 2019 CASH FLOW STATEMENT 50,801