Pursuant to 801.50(c) / 801.40(d), the assets of the newly formed entity include all assets contributed by any party. However, pursuant to 802.4(a) / 803.30(c), assets contributed by the acquiring person are exempt for the purpose of determining if that person has a filing obligation. If the value of the non-exempt assets is less than $50 million (as adjusted), then that acquiring person does not have a filing obligation. If the non-exempt assets do exceed the $50 million (as adjusted) threshold, then the size of transaction for the acquiring person (e.g., for filing fee purposes) would be calculated as the acquiring person’s percentage of ownership interest in the newly formed entity multiplied by the entire value of the assets of the newly formed entity (not just the non-exempt assets). Remember that this analysis must be applied to each person acquiring interests in the newly formed entity.
Question
We have a question about the filing fee. UPE1 and UPE2 are contributing some businesses into a new entity that will be controlled by UPE1. There will be a filing for UPE1 acquiring the business that UPE2 is contributing. The businesses that UPE1 is contributing are valued at far more than the value of the businesses that UPE2 is contributing.
In consideration, UPE2 will receive a small amount of interests in the new entity, but that acquisition will not be reportable because it will be a minority of interests in a non-corporate entity.
Technically, the value of the interests in the new entity that UPE1 will receive will be high after combining the businesses from UPE1 and UPE2, but that is mostly because of the larger value of the businesses that UPE1 already holds and is contributing.
In essence, the transaction involves UPE1 acquiring the businesses of UPE2 and should be valued based on the acquired UPE2 businesses. That being the case, it seems that the transaction value for HSR purposes (and for purposes of the filing fee), should be the value of the businesses (formally of UPE2) that UPE1 will hold that it did not already hold prior to the transaction, but please confirm.