1201011 Informal Interpretation

Date:
Rule:
Form Item 7
Staff:
Michael Verne
Response/Comments:

  – 1.      Correct - no response 2.      The acquiring person would report its overlap with the JV, but does not need to report the other venture because it is not an acquired entity that is a party to the acquisition 3.      It would not have to disclose the other overlap (see 2)

Question

From:

(Redacted)

Sent:

Wednesday, January 25, 2012 6:11 PM

To:

Verne, S. Michael

Subject:

Joint Ventures

Mike,

Whenreporting a joint venture formation under 801.40 or 801.50, are 6-digit NAICS overlapsbetween two venturers still relevant to Item 7? The SBP of July 31, 1978 at33532 states that they are relevant but I do not know whether this is still thePNO's view.

Howwould a reporting person respond to Item 7 in connection with a joint ventureformation in the following scenarios?

1. There is a 6-digit NAICS overlap between assets of the reporting person (not to be contributed to JV) and assets (not to be contributed to JV) of another acquiring person not required to file. There is no overlap between the reporting person and the 6-digit NAICS codes in which the JV is expected to derive revenues. Would a response to Item 7 be required? The 2011 Form instructions suggest that no response Item 7 would be required.

2. There is a 6-digit NAICS overlap among (a) assets of the reporting person (not to be contributed to JV), (b) assets (not to be contributed to JV) of another acquiring person not required to file and (c) the NAICS codes in which the JV is expected to derive revenues. In that case, I assume the reporting person would respond to Item 7. Would they also need to list the other venturer in 7(b)(i) since it is a "party to the acquisition."

3. There is a 6-digit NAICS overlap between (a) assets ofthe reporting person (not to be contributed to JV), and (b) the NAICS codes inwhich the JV is expected to derive revenues. There is also a separate 6-digitNAICS overlap between assets (not to be contributed to JV) of another acquiringperson not required to file and (b) the NAICS codes in which the JV is expectedto derive revenues. In this case, the reporting person would respond to Item 7with respect to its own overlap. Would it also have to disclose the otheroverlap?

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Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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