2501004 Informal Interpretation

Sheinberg, Samuel I.
From: 	HSRHelp
Sent: 	Monday, January 27, 2025 12:24 PM
To: 	HSR Auto Forward List
Subject: 	FW: Question about 801.13(b)
From: Whitehead, Nora
Sent: Monday, January 27, 2025 12:23:53 PM (UTC-05:00) Eastern Time (US & Canada)
To:
Cc:
Subject: RE: Question about 801.13(b)
Given that the instant acquisition and the future acquisition are part of the same agreement with the same seller, they
are treated as one transaction for HSR purposes. If the buyer plans to acquire assets under the agreement, it must file
HSR for the entire transaction.
From: HSRHelp <HSRHelp@ftc.gov>
Sent: Wednesday, January 22, 2025 7:41 PM
To: HSR Auto Forward List <HSRAutoForwardList@ftc.gov>
Subject: FW: Question about 801.13(b)
From:
Sent: Wednesday, January 22, 2025 7:41:14 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp <HSRHelp@ftc.gov>
Cc:
Subject: Question about 801.13(b)
Dear PNO:
We have a question regarding	the applicability of the	HSR	rules	to	a rather unusual structure involving the
acquisition of multiple	assets.
More than a year	ago, the parties entered into	a multi-billion dollar agreement covering	a number of
assets that contemplates closing in 2028. Should this transaction ultimately be	consummated,	an	HSR
filing will be	required.
A provision of the agreement allows the seller to require the buyer to acquire certain of the	assets that
are otherwise	covered	by the agreement if	certain events occur and	the seller chooses to invoke the
provision. In other words, if these	events occur	and	the seller	invokes this provision, the seller can
require the	buyer to acquire	the assets sooner than it would have	acquired them under the	original
agreement. Once this happens,	the	assets that have been “put”	in this way are in effect removed from
the agreement since they cannot be acquired twice.
The seller has chosen to	invoke this provisions as to one small group of assets,	valued at approximately
$1 million, which represents	less	than 0.1% of the total amount of assets that	will be acquired.
The question is whether the	parties	are required to	aggregate	this small bit of assets with the other assets
that	are covered by	the	agreement.
We do not think aggregation is required in these	unusual circumstances	for several reasons.
First, by invoking the “put”	provision,	the	seller in effect is creating a new acquisition agreement that is
limited to	the particular assets that	are	the	subject of the	“put.” As	noted,	the original agreement was
entered into more than	180 days ago.
Second, these assets are	valued at less than the size-of-transaction test.
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Third,	if a filing were	required now for all of the	assets covered by the original agreement,	it would lead to
the perverse result that the filing would expire prior	to the closing of	that agreement, thus necessitating a
second filing closer to the time that the second	agreement is	to	be closed. The agencies would
accordingly have	to review the transaction twice, and the parties would be put to the expense	of two
filings	(and	two filing fees), which would make no sense.
We are,	of course, aware of the aggregation requirements of 16 CFR	801.13(b). Under 801.13(b), if any
further assets are “put” to	the buyer within 180	days of the closing	of the $1 million transaction, they
would need to be aggregated with the	assets in the	$1 million transaction to	determine if a filing is
required. (See Example	2 to 16 CFR	801.13(b).)	It seems plain, however, that the	purpose of 801.13(b)
was to	require aggregation of assets that are acquired	inside the	180-day window,	not a	year or more
later as would	be the	case here. In addition, 801.13(b) on its own terms only requires	aggregation with
assets covered by an agreement or letter of intent that was entered into withing the previous 180 days.
Here, the	agreement at issue was entered into	more than 180 days ago, and closing is	not expected until
2028.
Given the size-of-transaction of the	$1 million transaction does not meet the	size-of-transaction test and
we do not believe anything else	from the agreement needs to	be aggregated with the	$1	million
transaction, we do not think an HSR filing would be required at this time for the $1 million transaction.
Please let us know if that is correct. Thank you.
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