0812008 Informal Interpretation

us-ftc-hsr-informal-interpretations-6c8b19a0d1b7bbcc63333254902b3b3d0812008 Informal InterpretationGuidance

Date
Rule
802.4, 801.2
Staff
Michael Verne
Response/Comments
12/22/2008 1. The formation of Newco is not reportable because all that is being contributed is cash. A and B's acquisition of Newco voting securities is exempt under 802.4. 2. Newco's subsequent acquisition of assets from C is reportable. A is the acquiring person (by holding 51 % of Newco and the controlling equityholder (I'm assuming this is control for HSR purposes) of C is the acquired person.

Question

From: (redacted)
Sent: Monday, December 22, 2008 10:39 AM
To: Verne, B. Michael

Subject: RE: HSR question

Please note that, with respect to the below, my analysis is as follows:

1. Formation of Newco ("N"): A and 8 must file but N need not file per Section 802.41 (ex. 1).

2. Acquisition of assets from C: Both N and C must file. The intraperson exemption (Section 802.30) does not apply since 8 does not control N (only 49% ownership) and, therefore, the fact that 8 and C have the same controlling equityholder is rendered irrelevant in the analysis.

Please let me know if you agree.

Thanks again

------------------------
From: (redacted)
Sent: Friday, December 19,2008 3:38 PM
To: 'Verne, B. Michael' Subject: RE: HSR question

As a follow up, please note that A will own 51 % of Newco and 8 will own 49%.

------------------------
From: (redacted)
Sent: Friday, December 19, 2008 3:07 PM
To: 'Verne, B. Michael' Subject: HSR question

Mr. Verne:

Sorry to bother you again but I have another question.

The question is whether two HSR filings are required or just one.

Here's the scenario. Parties A and 8 will each contribute approx. $100mm to form Newco, and Newco will then spend $200mm+ to acquire assets from C. Note that 8 and C are "sister" entities, each publicly traded, but wI the same controlling equityholder. The two transactions would close substantially concurrently.

Again, thank you in advance.


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