0501011 Informal Interpretation

us-ftc-hsr-informal-interpretations-516a41bf51b3586fef9317d0af9135360501011 Informal InterpretationGuidance

Date
Rule
801.40
Staff
Michael Verne
Response/Comments
This should be analyzed as the formation of D under 801.40. D is not an acquiring person with respect to the X voting securities being contributed by A, B & C.

Question

From: (redacted)
Sent: Monday, January 31, 2005 10:22 PM
To: Verne, B. Michael
Subject: HSR Question

Hi Mike. I havea (hopefully quick) HSR interpretation question for you.

The fact patternis as follows:

A, B and Ccurrently hold 36%, 22% and 10% respectively of the voting securities in X. A,B and C are proposing to contribute their respective shareholdings in X to anew company, D. D will then hold 68% of the voting securities in X. A, B, and Cwill hold shares in D in the proportions of their contributions, so that Aholds 53%, B 32% and C 15%.

Assuming thevalue of the shares being contributed to D by each party exceeds $50 millionand all parties meet necessary size thresholds, how should this be analyzedunder HSR - as a joint venture under 801.40, sothat potentially only A, B and C have filings, or as the acquisition of 68% ofthe voting securities of X by D, so that filings will be made by X and D? Basedon other informal interpretations I have seen, I assume the former, but wantedto check for certain.

I am on the roadtomorrow, so please respond by email, or leave a voice mail and I will call youback.


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