Acquisitions and Divestitures (Tables)

6 Months Ended

Jun. 30, 2025

Business Combination, Separately Recognized Transaction

The acquisition-date fair value of the consideration consisted of the following:


(in millions)	Fair Value of Purchase Consideration
Cash paid	$	154
Fair value of previously held equity interest	193
Fair value of redeemable non-controlling interest	237
Settlement of preexisting relationship	53
Total	$	637

Purchase Price Allocation

The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Idrica:


(in millions)	Fair Value
Cash and cash equivalents	$	4
Receivables	5
Prepaid and other current assets	6
Goodwill	522
Other intangible assets, net	165
Other non-current assets	15
Accounts payable	(8)
Accrued and other current liabilities	(5)
Short term borrowings and current maturities of long-term debt	(16)
Long term debt	(7)

Deferred income tax liabilities	(41)
Other non-current accrued liabilities	(3)


Total	$	637

Summary of Intangible Assets Acquired

The following table summarizes key information underlying identifiable intangible assets related to the Idrica acquisition:


(in millions)	Useful Life (in years)(a)	Fair Value (in millions)
Customer Relationships	24	$	28
Backlog	9	2
Technology	7	132
Trade Name	10	2
Intangible Assets Under Construction	N/A	1
Total	10	$	165

(a)Useful life approximates weighted average useful life.

•The preliminary estimates of fair value of Idrica’s identifiable intangible assets were determined using a combination of the income and cost approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements. Intangible assets consisting of the customer relationships, backlog, and trade name were valued using the multi-period excess earnings method (“MEEM”) or the relief from royalty (“RFR”) method, both of which are forms of the income approach. The intangible asset related to Idrica’s developed technology was valued using the replacement cost approach.

•The customer and backlog intangible assets were valued using the MEEM. The MEEM is an approach where the net earnings attributable to the asset being measured are isolated from other “contributory assets” over the intangible asset’s remaining economic life.

•The trade name intangible asset was valued using the RFR method. The RFR method suggests that in lieu of ownership, the acquirer can obtain comparable rights to use the subject asset via a license from a hypothetical third-party owner. The asset’s fair value is the present value of license fees avoided by owning it (i.e., the royalty savings).

•The developed technology intangible asset was valued using the replacement cost approach. The replacement cost approach is a valuation method that relies on estimating the replacement costs of assets based on the principle that an asset would not be purchased for a price higher than the cost to replace it with an asset of comparable utility.