From: Berg, Karen E.
Sent: Friday, February 5, 2021 1:36:07 PM (UTC-05:00) Eastern Time (US & Canada)
Subject: RE: Item 5
Sent: Friday, February 5, 2021 11:58:13 AM (UTC-05:00) Eastern Time (US & Canada)
Subject: Item 5
I have a question regarding the proper reporting of revenues for Item 5 of the HSR form in relation to manufactured products sold by the acquired person in the US.
The products that are sold in the US are manufactured by third parties. After manufacture by third parties, the products are shipped to the acquired person’s controlled subsidiary outside the US where they are repackaged, and some items are added to the box. No two pieces are put together, it is simply a matter of transferring the manufactured product and inserting additional items into the box. The boxes are then sent to the acquired person’s controlled US entity where additional items are added to the box before being sold to US customers. Again, no separate pieces are joined together by the US entity.
It seems to me that the revenues for the acquired person should be reported in Item 5 under a wholesale/retail NAICS code rather than a manufacturing code, and at the transfer price from the acquired person’s non-US entity to the US entity.
Do you agree?