0601025 Informal Interpretation

us-ftc-hsr-informal-interpretations-a6acfb57d23eb5d39dd766bec6ac15710601025 Informal InterpretationGuidance

Date
Rule
802.4
Staff
Michael Verne
Response/Comments
The acquisition of Y by X is exempt under 802.4. Because none of the minority holdings of Y exceed $53.1 MM in value, there are no potentially reportable secondary acquisitions either. The acquisition of X voting securities by Y's shareholders would likewise be exempt under 802.4.

Question

Hi Mike,

I have a question about theapplicability of 802.4. Below are a set of stylized facts. I wanted to discussthis scenario with you whenever you get a chance. My telephone number is(redacted).

Company X is an investment companyregistered under the 1940 Act

Company Y is also an investment companyregistered under the 1940 Act

Company X and Company Y are their ownUPEs.

Each of Company X and Company Y are managedby investment advisers, who do not control Company X or Y respectively.

Neither Company X nor Company Y controlany other entities.

Neither Company X nor Company Y have anyminority investments in issuers that are valued at above $53.1 million.

Company X intends to purchase 100% ofthe voting securities of Company Y. As consideration for the acquisition,Company X intends to provide Company Y's shareholders with shares of CompanyX's stock.

Assume that the size of person test andsize of transaction test are satisfied.

All of the assets of Company X and ofCompany Y consist of cash, money market funds, and voting and non-votingsecurities, the acquisition of which assets would, I believe be exempt under801.21 of the HSR Act.

Myquestion is whether the acquisition of Company Y's stock by Company X would beexempt under 802.4. Similarly, is the acquisition of Company X's stock byCompany Y exempt under 802.4?

MV COMMETS

The acquisition of Y by X isexempt under 802.4. Because none of the minority holdings of Y exceed $53.1 MMin value, there are no potentially reportable secondary acquisitions either.The acquisition of X voting securities by Y's shareholders would likewise beexempt under 802.4.


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