Abraxis BioScience (ABII)

3. Merger, Goodwill and Intangibles

FACE="Times New Roman" SIZE="2">2006 Merger

On April 18, 2006, Old APP, completed a merger with ABI, Old APP’s
former parent, pursuant to the terms of the Agreement and Plan of Merger dated November 27, 2005. For accounting purposes, the 2006 Merger was treated as a downstream merger with ABI viewed as the surviving entity, although APP was the
surviving entity for legal purposes. As such, effective as of the merger date, the 2006 Merger was accounted for as an implied acquisition of Old APP’s minority interests using the purchase method of accounting. Therefore, the historical book
value of the minority interests was stepped up to its estimated fair values and the historical shareholders’ equity of the accounting acquirer, ABI, has been retroactively restated for the equivalent number of shares received in the 2006
Merger.

At the April 18, 2006 acquisition date, the minority shareholders owned 34.17% of Old APP’s total outstanding common
shares. Based on a $39.14 price for Old APP’s common stock, representing the weighted average price of its common stock for the period three trading days prior to and three trading days subsequent to the 2006 Merger announcement date, the fair
value of the minority interests as of April 18, 2006 totaled approximately $974.8 million. This amount represented the estimated fair market value assigned to the shares owned by minority interests and is referred to as the purchase price
attributed to minority interests. The purchase price attributed to minority interests was allocated to the minority interests’ pro-rata share of Old APP’s tangible and identifiable intangible assets and liabilities based on their estimated
fair values at the acquisition date. The excess of the purchase price attributed to minority interests over the minority interests’ pro-rata share of the fair values of Old APP’s assets and liabilities was reflected as goodwill. Of the
$974.8 million, $492.1 related to us and therefore 34.17% of our tangible and intangible assets were stepped up to $492.1 million, including $241.4 million of goodwill and deferred tax liabilities of $103.7 million.