1609007 Informal Interpretation

From: 	Shaffer, Kristin
To:
Cc: 	Walsh, Kathryn E.
Subject: 	RE: HSR Query - Rule 801.40
Date: 	Thursday, September 22, 2016 10:53:00 AM
Since this transaction involves the merger and consolidation of multiple entities, 801.40 does not
apply. Please see PNPM #46, which describes how to analyze simultaneous consolidations.
Best regards,
Kristin
________________________________
Kristin Shaffer
Attorney
Premerger Notification Office
Federal Trade Commission
202-326-3434 | kshaffer@ftc.gov
From:
Sent: Wednesday, September 21, 2016 2:31 PM
To: Walsh, Kathryn E.; Whitehead, Nora
Subject: HSR Query - Rule 801.40
Dear Kate and Nora:
I write to request your confirmation that a potential transaction contemplated by our client and
described below is properly characterized under 16 C.F.R. § 801.40.
FACTS
The transaction will occur in multiple stages, all set to happen simultaneously or nearly
simultaneously with one another.
Individual A will form a wholly-owned U.S. Holdco (“Holdco”) and hold 100% of its shares.
Immediately following Holdco’s formation, it will enter into a Merger Agreement whereby
Company A, Company B and Company C, each of which is its own ultimate parent entity, will
merge with and into Holdco.
Pursuant to the Merger Agreement, shareholders of each of these entities (Companies A, B
and C) will receive Holdco shares back.
On the same day that Holdco acquires these three entities, “Investor” will make a cash
investment in Holdco of approximately $100,000,000 and also contribute certain of its
businesses to it (valued at approximately $70,000,000). Investor will receive Holdco shares
valued in excess of $78.2 million in return for these contributions.

From its creation, Holdco will be a shell corporation formed solely for the purpose of holding the
assets of Companies A, B and C and the contributions (cash and contributed businesses) of Investor.
Holdco will not hold any other assets or undertake any business prior to its acquisition of Companies
A, B. and C and the contribution of cash and certain businesses of Investor, other than to be a party
to the merger and investment agreements.
ANALYSIS
Given that Holdco is being formed solely for the purpose of holding the assets resulting from the
merger among Companies A, B and C; the formation of Holdco and merger of Companies A, B and C
occurs contemporaneously; and, the fact that the investment by Investor takes place at the same
time that Holdco will acquire Companies A, B, and C, I believe the transaction would be viewed as
falling under 801.40, with (assuming all other jurisdictional triggers are met) only those shareholders
receiving Holdco shares valued in excess of $78.2 million potentially triggering a filing obligation and
no “acquired person” filing being required.
I believe this interpretation is further supported by the following Informal Interpretations, in their
evaluation of the application of 801.40 and of the continuum theory:
Informal Interpretation 0704004 (April 11, 2007), available at:
https://www.ftc.gov/sites/default/files/documents/informal interpretations/0704004-informal-
interpretation/0704004.pdf
Informal Interpretation (0702017) (February 26m 2007), available at:
https://www.ftc.gov/enforcement/premerger-notification-program/informal-
interpretations/0702017
Thank you in advance for your guidance on this topic,
Best regards,