1205004 Informal Interpretation

Michael Verne

Agree. K Walsh concurs.





Friday, May 11, 2012 10:04 AM


Verne, B. Michael


HSR Size-of-Transaction - CONFIDENTIAL


Hopingyou can confirm some analysis for us:

Ourclient, Company A, plans to acquire 100% of the interests in Company B andCompany C. Company B is 100% owned by Person X and Person Y in equal, 50% shares.Company C is owned by Person X, Person Y and Person Z, also in equal shares(with no Person with the right to 50% or more of profits or assets upondissolution).

Takingeach acquisition separately, it is our understanding that, to the extent the size-of-personand size-of-transaction tests are met, Company A would have to file HSR foracquisition of 100% of Company B, with both Person X and Person Y filing asacquired UPEs (Le., both "control" Company B). It is also ourunderstanding that, to the extent the size-of-person and size-of-transactiontests are met, Company A would have to file HSR for acquisition of 100% ofCompany C, with Company C filing as its own UPE.

Theissue arises where neither transaction, taken separately, would meet the HSR size-of-transactiontest. Our question is whether the fact that Persons X and Y (the UPEs ofCompany B) are also selling their interests in Company C would somehow requirethat the value of the interests being sold by X and Y in Company B would needto be aggregated with those being sold by X and Y in Company C. Our reading ofOpinion 142 in the Premerger Notification Practice Manual (Fourth Edition)suggests that the common holdings of multiple seller UPEs need not beaggregated, and the acquisitions of Company B and Company C would not beaggregated for the size-of-transaction analysis (Le., these represent twodistinct transaction because they are purchases from distinct UPEs). Do youagree?

Pleaselet us know if you need any clarification or additional information.

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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