Question
(redacted)
March 24, 1986
Mr. Patrick Sharpe,
Compliance Specialist
Room 301
Federal Trade Commission
Washington, D.C. 20580
Dear Patrick:
I am writing to confirm our telephone conversation of Friday. I represent a manufacturing corporation which is negotiating to be acquired by a holding corporation. The acquisition will be accomplished through a merger of the holding companys subsidiary into my client. The holding company is wholly-owned by a general partnership consisting of three partners, no one partner of which owns greater than 50% of the partnership. Further, I understand that no partner has the contractual power to designate a majority of the persons exercising functions similar to those of corporate directors in the management of the partnerships affairs.
You stated that, for purposes of the size-of-parties test of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Federal Trade Commission deems a partnership to be its own ultimate entity (absent extreme circumstance). If the partnership fails to meet the applicable size test, the premerger notification requirements will not apply.
It is my understanding that the partnership involved in this transaction has less than $10,000,000 in sales or sales. In addition, it is my understanding that the partnership is in fact its own ultimate parent entity because no extreme circumstance, such as the partners in the partnership being corporations wholly-owned by a single entity, exists. Accordingly, I have concluded that the premerger notification requirements do not apply to this acquisition.
I believe that this conclusion is consistent with our conversations of Friday. If, however, you have any questions concerning any of the statements in this letter that negatively impact my conclusion, please contact me by telephone at your earliest convenience. My direct line is (redacted)
Cordially,
(redacted)
(redacted)