Breaking down the goodwill emerging from an Italian business combination.

Starting from the theoretical assumptions developed in the previous chapters of the book, the chapter focuses its attention on a business combination that involved two large Italian bank groups in 2007, namely, Unicredit and Capitalia. Notably, the chapter, after having determined the internally generated goodwill of the acquired entity (Capitalia), analyzes it through a breakdown process aiming at identifying: - the portion of internally generated goodwill that comes from an analytical projection of the flows of abnormal earnings expected in a fixed-term period (real goodwill) and the portion for which this projection is not realistically possible (terminal goodwill); - the portion of real goodwill and terminal goodwill values that implies a growth with respect to current conditions (growth goodwill) and the portion that implies no growth (current goodwill); - the origins of the internally generated goodwill in relation to the different strategic business areas in which the firm operates.