0504013 Informal Interpretation

us-ftc-hsr-informal-interpretations-ba2ecafc34eb297587d3d6780d4711770504013 Informal InterpretationGuidance

Date
Rule
801.2
Staff
Michael Verne
Response/Comments
(1) Agree; (2) correct for corporation. If Newco is an LLC, 33.3% would not be reportable regardless of value.

Question

From: (redacted)
Sent: Monday, April 18, 2005 1:47 PM
To: Verne, B. Michael
Subject: HSR Query

Mike, allow meto run a JV question by you to see if the following transaction is reportable:

The transactionis between ABC Corporation and XYZ LLC. ABC Corporation with worldwide sales& assets in excess of US$1 billion will set up a subsidiary (Newco) as anLLC or corporation. Newco will then buy all of the assets of XYZ LLC for apurchase price valued at US$18 million paid as follows: US$7 million in cashand 33.3% interest in Newco.

The twotransactions I see are as follows:

(1) The acquisition by Newcoof the assets of XYZ LLC would only be reportable if the value of
those assets exceeds US$53.1 million.

(2)Regardless of whetherNewco is an LLC or corporation, the acquisition by XYZ LLC of a 33.3% interestNewco is reportable only if, as a result of the transaction, theshares/interests of Newco held by XYZ LLC exceed US$53.1 million.

I would begrateful if you could confirm that my understanding of the analysis is correct.


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