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Date

Tags:

Rule
801.2, continuum
Staff
Kate Walsh
Response/Comments

We apply continuum in a limited set of circumstances.  A typical scenario is a reorganization followed by an acquisition where there are a number of steps in the reorganization that each trigger a filing, but we only ask for one filing at the end of the process to capture the acquisition.

We do also see this circumstance a great deal: A is buying B, and B is buying C.  We have permitted A to file for the C acquisition as if it already holds B, as long as A has also filed to acquire B.  This is not continuum.

So, we don’t think your scenario fits into continuum, and we need two filings.

Question

From: Walsh, Kathryn E.
Sent: Tuesday, December 01, 2015 12:35 PM
To: [REDACTED]; Gillis, Diana L.; Whitehead, Nora; Berg, Karen E.
Subject: RE: Application of Continuum Theory

 

[REDACTED]:

We apply continuum in a limited set of circumstances.  A typical scenario is a reorganization followed by an acquisition where there are a number of steps in the reorganization that each trigger a filing, but we only ask for one filing at the end of the process to capture the acquisition.

We do also see this circumstance a great deal: A is buying B, and B is buying C.  We have permitted A to file for the C acquisition as if it already holds B, as long as A has also filed to acquire B.  This is not continuum.

So, we don’t think your scenario fits into continuum, and we need two filings.

Kate

From: [REDACTED]
Sent: Tuesday, November 24, 2015 4:37 PM
To: Gillis, Diana L.; Whitehead, Nora; Walsh, Kathryn E.; Berg, Karen E.
Subject: Application of Continuum Theory

Nora, Diana, Kate, and Karen,

Through two agreements, A will acquire a controlling stake in B (Agreement 1) and B will acquire D from C (Agreement 2), with the acquisition of D by B funded in part with funds invested by A as consideration for A acquiring its controlling stake in B.  Each of  the A acquisition of B and the B acquisition of D separately trigger HSR.  Both transactions are expected to close same day. Agreement 1 is conditional upon the simultaneous close of the acquisition contemplated by Agreement 2.  Although Agreement 2 is not explicitly conditional on Agreement 1, in fact if A does not invest cash in B as contemplated in Agreement 1 then the close contemplated in Agreement 2 likely will not take place, unless B receives sufficient funds to cover the purchase price for D from other sources. Under the continuum theory I understand that we can make one acquiring person filing with A as the UPE of B and B as the acquiring entity in the acquisition of D, and one acquired person filing with C filing as the acquired UPE selling D to B (whose UPE is A).  Do you agree?

 Many thanks,

[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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