1104006 Informal Interpretation

Michael Verne

Agree – not reportable.


Sent: Monday, April 18, 2011 2:26 PM
To: Verne, B.Michael
Cc: (Redacted)

Subject: Rules 802.4, 802.51 and 802.50

I am writing to you to see if you agreewith our view that a filing will not be required based upon the facts as set forthbelow. For the purpose of this email please assume all the HSR size thresholds(size of persons and size of transaction) are met.

Our client (the "Buyer"), acorporation formed under the laws of Canada, will be purchasing from seller("Seller") both the assets of a corporation formed under the laws ofDelaware (U.S. Corp.") and the voting securities of a corporation formedunder laws of Hong Kong ("HK Corp."). The aggregate purchase price isapproximately $150 (MV comment $78MM) million. HK Corp., including allentities it controls, during its most recent fiscal year did not (i) holdassets in the U.S. having an aggregate total value of $66 million or more and(ii) have aggregate sales (including intercompany sales) in or into the U.S.of$66 million or more.

I have reviewed several informal staffopinions, including Informal Staff Opinions Nos. 0503018 as well as examplenumber three of Rule 802.51. It is our understanding that an acquisition ofvoting securities of a foreign entity would be exempt from the filingrequirements of the HSR Act under Rule 802.51 (b) if the Buyer was notacquiring control over a foreign issuer (including all entities controlled bythat foreign issuer) which either held assets located in the United Stateshaving an aggregate total value of over $66 million or made aggregate sales inor into the United States of over $66 million in its most recent fiscal year.In addition, it is also our understanding that in an acquisition of multipleentities under Rule 802.4 a purchaser can exclude from the calculation of the$66 million threshold applicable to non-exempt assets the value of votingsecurities of an issuer whose underlying assets, together with those of allentities it controls, consist of assets whose acquisition would be exempt fromthe requirements of the HSR Act pursuant to Section 7A(c) of the Clayton Act orpart 802 of the HSR rules. In addition, it is also our understanding that wewould not aggregate the U.S. sales and assets of the U.S. Corp. with any U.S. sales or assets of HK Corp when determining if the dollar limitations contained inRule 802.51(b) were exceeded.

Based upon the facts as stated above, webelieve in accordance with Rules 802.4 and 802.51(b) Purchaser should be ableto exclude from the calculation of the size of the transaction the value of thetransaction attributable to the purchase of the voting securities of HK Corp.In our transaction, although the aggregate purchase price is approximately $78million, the acquisition price attributable to the assets of U.S. Corp.,calculated in accordance with Rule 801.10(b), will result in the Buyer holdingless than $66 million of the acquired person's assets.

In the alternative, we believe that the transactioncould also qualify as exempt under a combination of Rules 802.50 and 802.4because the assets underlying HK Corp. do not generate $66 million of sales inor into the US (and therefore would be exempt under 802.50) and because the USassets being conveyed have a value of less than $66 million. See FTC PremergerOffice, "Steps for Applying Section 802.4"

We believe under the facts andcircumstances as described above the filing of a Premerger Notification Formunder the HSR Act would not be necessary with respect to Purchaser'sacquisition of the assets of U.S. Corp. and the voting securities of HK Corp.We would appreciate knowing whether you concur or do not concur with ouranalysis.

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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