8404005 Informal Interpretation

Date:
Rule:
801.40
Staff:
Dana Abrahamsen
Response/Comments:

No written comments

Question

(redacted)(Redacted)(Redacted)

(Redacted)

Dana Abrahamsen, Esq.
Premerger Notification Office
Federal Trade Commission
6th Street & Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Re: April 5, 1984 Telephone Conversation

Dear Dana:

In a conversation this morning, I requested an informal opinion with respect to the following factual situation:

Mr. X (a $100 million person), together with his wife and children (not minors), will form Partnership A. Partnership A will join with unrelated party B to form Newco. Partnership A will own 75% of Newco, unrelated party B will own 25% of Newco.

Newco will receive a total of $3 million in contributions from A and B. Newco also will borrow $25 million from unrelated sources, and these funds will not be guaranteed by any entity.

Newco will make a tender offer for Company Y, followed by a merger, for $28 million.

Question

Do any of the above transactions require a filing pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976?

Discussion

You have advised me that none of the transactions described above requires a Hart-Scott-Rodino filing for the following reasons:

(a) The formation of a partnership is not subject to the filing requirements of Hart-Scott-Rodino Act;

(b) The formation of Newco, a corporation which will have total assets of $3 million, does not meet the requirements of Rule 801.40; and

(c) Newcos tender offer for, and merger with, Company Y is not reportable because Newco, together with its ultimate parent entity, Partnership A, does not meet the $10 million size of person test. You noted that the $25 million borrowed by Newco for its transaction with Company Y is not counted as an asset of Newco in assessing Newcos size.

I believe this accurately describes our conversation and the informal opinions which you rendered today. If it does not, please contact me as soon as possible.

Sincerely yours,

(Redacted)

(Redacted)

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.

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