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Date
Rule
801.2
Staff
Michael Verne
Response/Comments
No this is not an acquisition.

Question

From: (redacted)

Sent: Thursday, October 12, 2006 9:43 AM

To: Verne, B. Michael

Subject: HSR question

Hi, Mike -

I hope you are well. I have a quick question for you. CompanyA is considering an arrangement whereby Company B (a customer of Company A)would pay Company A cash in exchange for future rights to purchase Company A'sproducts at a discount. Company A will use the money to build a new plant toproduce more of the products. It is not entirely clear how this might bestructured, but assuming no new business entity is formed, would the right tofuture purchases at a discount be considered an "asset" for HSRpurposes? It looks like a loan in many ways, and it might end up being a loanif Company B later decides to get back cash (plus interest) rather than takethe products at a discount for the full amount of time contemplated. In otherwords Company B may later decide to get back some cash and discontinue purchasingat a discount.

About Informal Interpretations

Informal interpretations provide guidance from PNO staff on the applicability of the HSR rules to specific fact situations. They do not necessarily reflect the position of the Commission. 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. 

Learn more about Informal Interpretations.

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