1209009 Informal Interpretation

Date:
Rule:
802.5
Staff:
Michael Verne
Response/Comments:

  - Agree.  K Walsh concurs

Question

From:

(Redacted)

Sent:

Thursday, September 27, 2012 4:34 PM

To:

Verne, B. Michael

Subject:

16 CFR 802.5

Mike

CompanyA has entered into a transaction to monetize certain of its real estate andrelated assets consisting of approximately 7,100 to 7,300 cellular phone towersites (the "Sites"). Company B will make an upfront payment in theapproximate range of $2.0 billion to $2.8 billion to Company A in exchange forthe right to lease or purchase the cell tower and related real property at theSites and to operate the Sites. The transaction does not include the transferor sale of any employees, support functions (other than for a short periodpursuant to a transition services agreement), goodwill, or other assets thatare not related to the Sites.

Underthe definitive documentation, Company B will obtain a long-term lease for themajority of the Sites (approximately

83%-91%of the Sites), pursuant to which Company B will lease Company A's interest inthe leased real property, the tower located at each site, and the relatedequipment and improvements with respect thereto. The term of such lease will

rangefrom 23 to 37 years, depending on the remaining economic life of the Sites.Company A will also transfer to Company B the related collocation agreements(including, the right to manage and collect the rent from such collocationagreements). At the end of the applicable lease terms for each Site, Company Bwill have the option to purchase the leased Site at an agreed price. A smallerportion of the Sites (approximately 9% to 17% of the Sites) will be sold toCompany B. For these sale Sites, Company B will purchase Company A's interestin and to the owned or leased real property and all collocation agreements withrespect to such Sites.

Ineach case, Company B will then have the right to market all available capacityat the Sites and maximize the collocation revenue that may be derivedtherefrom. A portion of the collocation space at each of the Sites leased andsold to Company B will be subleased or leased, as the case may be, back toCompany A for an initial 10-year lease term with eight five year renewal terms.

Basedon the PNO's interpretation of January 3, 2012 (http://www.ftc.gov/bc/hsr/informal/opinions/1201001.htm).we believe that this transaction is exempt under 16 C.F.R. 802.5. We wouldappreciate your confirmation of our understanding.

Thanks,as always. Please call if you have any questions or need additionalinformation.

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