Question
(redacted)
April 8, 1988
FEDERAL EXPRESS
Wayne Kaplan
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Dear Mr. Kaplan:
On March 9, 1988, you and I discussed the interpretation by the Federal Trade Commission of the phrase will not confer control of as used in 16 C.F.R. 802.51(b). You indicated that if no foreign person acquired 50 percent or more of the voting securities of (or otherwise controls ) a foreign issuer then the standards in 802.51(b) (1) and (2) need not be addressed and no filing requirement will arise for such foreign person. I am writing to confirm the substance of our conversation as it applies to the facts set forth below.
Summary of the Facts
A is a company incorporated in Liberia whose principal place of business is resident in Bermuda. B is a company incorporated In (redacted) whose principal place of business is resident in (redacted) C is a company incorporated (redacted) whose principal (redacted) of business is resident in (redacted) D is a company incorporated in Bermuda. E is a company incorporated in Sweden whose principal place of business is resident in Sweden. F is a company incorporated in Finland whose principal place of business is resident in Finland. None of AS, B, C, D, E or F are controlled by any other person within the meaning of 801.1(e) (2) (i). G is a company incorporated in Panama whose principal offices are in the United States.
A, B and C each own, directly or through wholly-owned foreign subsidiaries, one-third of each of a limited partnership, its corporate general partner and five additional partnerships owning certain vessels operated by the limited partnership (collectively, H). Each of the principal entities comprising H is organized in a foreign jurisdiction and Hs principal place of business is resident in Bermuda. A, D, R, F and G own 51%, 9.8%, 12.25%, 12.25% and 14.7% of I, a company incorporated in Liberia whose principal place of business is resident in Barbados.
A, B, C, D, E, F and G (the Parties) have entered into an agreement pursuant to which (redacted) will be formed. (Redacted) will be incorporated in Liberia and will have its principal office in Bermuda. Each of the Parties will contribute all of their interests in H and I in exchange for the following percentages of common stock of (redacted)
A 36.160%
B 28.000
C 28.000
D 1.568
E 1.960
F 1.960
G 2.352
100.000%
For purposes of certain additional agreements between A and each of B and C, A, B and C have assigned a value of $4,500,000 for each 1% of the common stock of (redacted) ($450,000,000 in the aggregate).
Analysis
We believe that these facts support the conclusion that this transaction will not create a filing obligation for any of the Parties under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The acquisitions by each of A, B, C, D, E and F will each be acquisitions by a foreign person of the voting securities of a foreign issuer, (redacted) None of such persons will acquire control of (redacted) within the meaning of 802.51(b) and, therefore, an inquire need not be made as to whether (redacted) holds assets located in the United States . . . having an aggregate book value of $15 million or more or whether (redacted) in turn controls a U.S. issuer with annual net sales or total assets of $25 million or more.
G, a U.S. issuer, will only acquire 2.353% of (redacted) which is valued at $10,584,000. Gs acquisition, therefore, does not meet the size of transactiontest.
Please call me if you have any questions about the factual description or analysis set forth above. If I have not heard from you before 4:00 p.m. on Wednesday, April 20, 1988, I will conclude that you agree with the conclusions stated herein.
(Redacted)
(Redacted)