1301008 Informal Interpretation

Michael Verne

  1.    We have historically treated S.a.r.L. entities as non-corporate. 2.    We are fine with these multiple steps all being treated as part of the JV formation K Walsh concurs.

UPDATE June 1, 2016: Response (1) no longer represents the position of the PNO.  Please see https://www.ftc.gov/news-events/blogs/competition-matters/2016/05/corporate-or-non-corporate-new-approach-classifying.





Tuesday, January 08, 2013 4:15 PM


Verne, B. Michael




Project Trinity (HSR)


Hopeall is well. Tom and I are working on a potential JV formation transaction. Wehave two HSR questions for you and would be grateful if you could pleaseconfirm that our answers are correct out of an abundance of caution:

1.The NewCo JV itself willbe a Luxembourg S.a.r.L., which will elect to be treated as a partnership forU.S. tax purposes. The board will consist of employees of the ultimate parentof the partners of the NewCo JV or controlled subsidiaries of the ultimateparents of the partners, but in order to establish that NewCo JV is a residentof Luxembourg for tax purposes, there will be residents of Luxembourg on theboard. Some of these Luxembourg residents may be outsiders, i.e., not employedby any of the ultimate parents of the NewCo JV partners or their controlledsubsidiaries, although that has not yet been determined. Is it still the FTC'sview that we may look at the S.a.r.L as a partnership for HSR Act purposes? -Wedid not find a recent informal opinion on point.

2.As part of the multi-stepJV formation transaction, two of the three Newco JV partners will contribute anexisting JV to the NewCo JV. On the following day, these partners will alsocontribute wholly-owned subsidiaries that hold plants leased to their existingJV to NewCo JV. Simultaneously, the third Newco JV partner will contribute awholly-owned subsidiary that holds its plants to Newco JV. The various stepswill only happen if the NEWCO JV closes. I assume, but wanted to confirm, thatwe can analyze the HSR reportability of this transaction as a single JVformation rather than analyze each step separately.

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