How to deal with target's company's non-controlling interest in a M&A scenario

Not sure if this is posted anywhere, but my question is as follows

Say Company A acquires 100% of Company B, on Company's B's book, there is a NCI item (which means, B consolidates a company without owning the majority interest of it).

  1. When B is being acquired, understand that B's assets & liabilities are valued at fair value. Is B's NCI also valued at fair value? How is this done?

  2. When calculating the transaction goodwill, if B's NCI does indeed valued at fair value, I have read somewhere that the calculations is as follows, is this correct?

Purchase price + FV of B's NCI - BV of B's net assets + B's goodwill write-off = Total allocable purchase price - write-ups of identifiable assets + write-ups of identifiable liabilities - DTA created + DTL created = Transaction goodwill

  1. When you are adjusting the balance sheet from before close to after close, would you be wiping off the entire common equities of B, while keeping B's NCI in the book (and write-up B's NCI to its FV)?

Thanks

2 Comments
 

Love how only actual analysts could answer this question. Given that majority of kids on here are college, you may not get a knowledgable answer. I hope you do

Haters gonna hate
 

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