3 Scope of Consolidation and Business Combinations

All in all, and including Vonovia SE, 350 companies (Dec. 31, 2016: 189) – thereof 259 (Dec. 31, 2016: 168) domestic companies and 91 (Dec. 31, 2016: 21) foreign companies – have been included in the consolidated financial statements as of December 31, 2017. In addition, four (Dec. 31, 2016: three) domestic companies and one foreign company were included as joint ventures.

For all subsidiaries included in the consolidated financial statements, the reporting date is December 31.

The list of Vonovia shareholdings is appended to the Notes to the consolidated financial statements as an integral part thereof.

Companies that have made use of the exemption provision set out in Section 264 (3) of the German Commercial Code (HGB) are marked accordingly in the list of shareholdings.

The changes as of December 31, 2017, compared with the previous year result from the acquisition of the conwert Group (211 companies, of which three are joint ventures), the PROIMMO Group (six companies) and five further acquisitions, two newly established companies, 35 mergers, 17 accruals, seven sales and two liquidations.

Acquisition of conwert Immobilien Invest SE

In connection with the voluntary public takeover offer that Vonovia SE made on November 17, 2016 to the shareholders of conwert Immobilien Invest SE, Vienna (conwert), a total of 72,902,498 or 71.54% of the shares had been tendered after the end of the acceptance deadline on December 19, 2016, 682,852 of which were tendered as part of an alternative exchange offer. This corresponds to 339,135 new Vonovia shares to be created.

The acquisition date, the time at which Vonovia SE obtained control of the conwert Group, was January 10, 2017. Vonovia SE’s non-cash capital increase, using authorized capital, was entered in the commercial register of Düsseldorf Local Court on this day, and was formulated as a suspensive condition of the takeover offer. This transaction shall be treated as a business combination in accordance with IFRS 3.

Pursuant to Section 19 (3) UebG (Austrian Takoeover Act), the acceptance deadline was extended by three months, starting at the time the result was announced, namely until March 23, 2017, (grace period), for those shareholders who had not yet accepted the offer. The conwert shareholders, who wanted to accept this offer, were given the option, as with the first tender period, to choose between a cash offer (payment of the cash purchase price of € 16.16 per share in conwert) and an alternative exchange offer (74 shares in Vonovia for every 149 shares in conwert) The extended acceptance period ended on March 23, 2017, with a further 21,965,224 shares in conwert being tendered. 4,947,554 shares were tendered in exchange for shares in Vonovia. This corresponds to 2,457,177 new Vonovia shares to be created. The capital increase was entered in the Commercial Register in Düsseldorf on March 31, 2017. This is a transaction that is linked to the actual share purchase (linked transaction). This means that the result of the grace period has to be taken into account when allocating the purchase price as of the acquisition date in respect of the consideration transferred and the resulting goodwill.

The consideration transferred for the acquisition of 93.09% of the total shares in the share capital of conwert comprises the following:

in € million






Net cash purchase price component



Equity instruments



Total consideration



As part of the first tender, the share-based component relates to 339,135 no-par value shares from the non-cash capital increase of Vonovia SE, which were exchanged by Vonovia SE for the conwert shares. This share-based component was valued at the XETRA closing price of € 31.48 per share on January 10, 2017, and amounts to € 10.7 million.

As part of the extended tender, the share-based component relates to 2,457,177 no-par value shares from the non-cash capital increase of Vonovia SE, which were exchanged by Vonovia SE for the conwert shares. This share-based component was valued at the XETRA closing price of € 32.59 per share on March 23, 2017 and amounts to € 80.1 million.

The allocation of the total purchase price to the acquired assets and liabilities (PPA) of the conwert Group as of the date of first-time consolidation is based on an external valuation report that was commissioned for this purpose to calculate the fair values of these assets and liabilities.

The measurement period for the first-time recognition of the merger with conwert Immobilien Invest SE, Vienna, ended on December 31, 2017.

The assets and liabilities assumed in the course of the business combination had the following fair values as of the date of first-time consolidation:

in € million






Investment properties



Cash and cash equivalents



Assets held for sale



Fair value of other assets



Total assets



Non-controlling interests



Non-derivative financial liabilities



Deferred tax liabilities



Fair value of other liabilities



Total liabilities



Fair value net assets









The goodwill represents synergies from the future integration of the conwert Group. The goals associated with the newly acquired conwert portfolio include strengthening its overall regional presence, realizing operational and financial economies of scale and optimizing structures.

Out of the trade receivables that were acquired, an amount of € 20.0 million is likely to have been uncollectible at the time of acquisition. The gross amount of the acquired trade receivables was € 110.9 million. The net carrying amount, which corresponds to the , was € 90.9 million.

Since January 2017, the conwert Group has recognized income from property management in the amount of € 181.9 million as well as an earnings contribution in terms of earnings before fair value adjustments of investment properties, interest, taxes, depreciation and amortization (EBITDA IFRS) of € 82.9 million, which are already reflected in Vonovia’s consolidated financial statements in accordance with the IFRS.

Transaction costs of € 5.6 million have been incurred in the 2017 fiscal year, with € 3.7 million recognized as other operating expenses that affected net income. In addition, other transaction costs in connection with the capital increase were offset against the capital reserves outside profit or loss, taking deferred taxes into account.

A total of 120 domestic and 91 foreign companies of the conwert Group were newly included in the scope of consolidation as of the date of acquisition.

On August 29, 2017, Vonovia implemented what is known as a squeeze-out process under the Austrian Squeeze Out Act (Gesellschafter-Ausschlussgesetz) at an extraordinary Annual General Meeting held in Vienna, based on which all of the outstanding shares held by the minority shareholders were transferred to Vonovia as the sole shareholder. This resulted in the shares no longer being listed on the Vienna Stock Exchange. The squeeze-out was entered in the Vienna commercial register with effect from October 25, 2017. Finally, on December 22, 2017, the change in legal form, turning the company into a limited liability company (GmbH), was entered in the Vienna commercial register.

Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.