Skip to main content
Date
Rule
802.1(d)(3)
Staff
Michael Verne
Response/Comments
Agree.

Question

From:

(Redacted)

Sent:

Thursday, June 07, 2012 11:02 AM

To:

Verne, B. Michael

Cc:

(Redacted)

Subject:

802.1 Question

Mike:

Thanksfor calling back this morning. I was trying to find a time where both (redacted) and I could return the call. Are youfree between 1:00 and 3:00 this afternoon? We could do the call anytime in thatwindow that works for you.

Inthe meantime, we thought it might help to send you our fact pattern andanalysis. It may even obviate the need for a call. We'll leave that up to you.

Hereis the fact pattern and analysis:

CompanyA is looking to sell a fixed number of commercial aircraft (the "Company AAircraft"). Company B is interested in acquiring the Company A Aircraftfrom Company A. We are seeking confirmation of our analysis that, on the factsdescribed below, Company B's acquisition of the Company A Aircraft will beexempt from the prior notification and waiting requirement under the HSR Actpursuant to 802.1(d)(3).

CompanyA and Company B are both commercial airlines and operate commercial aircraft.Each has total assets and annual net sales in excess of $136.4 million. Theaggregate purchase price for the Company A Aircraft will exceed $68.2 million.At the time of the proposed acquisition of the Company A Aircraft by Company B,each of the Company A Aircraft will have a useful life of greater than oneyear.

CompanyA presently intends to enter to into an agreement to acquire by way of a leasearrangement a larger number of commercial aircraft from Company C (the"Company C Aircraft") prior to closing on the sale of the Company AAircraft to Company B. The aggregate seat capacity of the Company C Aircraftwill exceed that of the Company A Aircraft. Company A will take delivery of theCompany C Aircraft over a six month period following execution of the agreementbetween Company A and Company C.

TheCompany A Aircraft are "used durable goods" within the meaning of802.1(d) because they each have a useful life of more than one year. Assumingthat Company A goes forward with its intended transaction with Company C,Company A will have "in good faith executed a contract to replace withinsix months after the sale ... all or substantially all of the productivecapacity of the [Company A Aircraft]" because the Company C Aircraft willhave an aggregate seat capacity in excess of that of the Company A Aircraft. Thereis no requirement that Company A operate the Company C Aircraft on any of theroutes previously served by the Company A Aircraft. The acquisition of theCompany A Aircraft by Company B is therefore exempt from the prior notificationand waiting requirement under the HSR Act pursuant to 802.1(d)(3).

About Informal Interpretations

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.

Learn more about Informal Interpretations.