Update December 18, 2015: This no longer represents the position of the PNO. An acquisition of co-op interests is to be treated as an acquisition of non-corporate interests.
– You are correct - there is no general exemption for the merger of two agricultural cooperatives. 1) Are the members entitled to vote for the election of directors? If so, this would be treated as an acquisition of voting securities. 2) Do the members have the right to profits or assets upon dissolution of the cooperative? If so, this would be treated as an acquisition of non-corporate interests. 3) If neither of the above is true, this would be treated as an acquisition of assets.
Sent: Thursday, January 05, 20126:44 PM
To: Verne,B. Michael
Subject: Application of HSR Rules to Agricultural Cooperatives
Pleaseadvise regarding the application of HSR rules to a merger involving twononprofit agricultural cooperatives. My understanding is that, assuming theparties meet the applicable size of person thresholds and the transaction wouldmeet the size of transaction threshold under HSR, there is no general exemptionunder HSR for a merger of two nonprofit agricultural cooperatives. Is that correct?
Ifmy understanding is correct, is the merger treated as an acquisition ofinterests in an unincorporated entity by the surviving cooperative or asits acquisition of the assets of the non-surviving cooperative?
Youshould note that each of the agricultural cooperatives were formed as a nonprofitcorporation under a state statute applicable to agricultural cooperatives,and each have members who are entitled to one vote each on matters submitted tomembers for their vote.
Anyguidance you can provide to me on this issue would be greatly appreciated.