Question
(redacted)
June 9, 1987
Andrew Scanlon
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Re: Hart-Scott-Rodino Antitrust Improvements Act of
1976-Amended Request for Interpretation and Advice
Dear Mr. Scanlon:
As you suggested during our telephone conversation yesterday, I am writing to request that you confirm the advice you gave me over the telephone yesterday concerning the applicability of the HSR Act to a proposed transaction which involves the indirect purchases by a foreign pension plan and a foreign corporate issuer, of partnership interests in an existing partnership. This letter supersedes the request which I sent you on June 3.
The parties to the proposed transaction are set forth in the diagram attached hereto as Exhibit A. In that diagram: X is an existing partnership which owns a parcel of real estate on which is situated a recently completed commercial office building; the three partners of X are corporations A, B and C;C is a wholly-owned subsidiary of B and A is unrelated to B and C; corporation B, a U.S. issuer, is a wholly-owned subsidiary of corporation Z, which is foreign issuer; corporation D is a foreign issuer which is a wholly-owned subsidiary of corporation Z; Z is the ultimate parent entity of the group of entities which includes corporations B, C, and D and has total assets and annual net sales in excess of $100,000,000; P-1" is a foreign pension plan for employees of corporation D; P-1" may be in the person of Z or may be its own person; H is a U.S. issuer which is proposed to be created by P-1"; E is an existing foreign issuer, 100% of the outstanding voting securities of which are held indirectly by Z further, Y, a foreign issuer not withing the person of Z also indirectly holds 50% of the outstanding voting securities of E, with the result that E is within the persons of both Z and Y; and M is a U.S. issuer which is proposed to be created by E.
The proposed transaction is the following: P-1" will create H and hold all of the outstanding voting securities of H. P-1" will invest an aggregate of approximately $20 million in H, part by payment for voting securities and part by loan. H will use the $20 million received from P-1" to purchase partnership interests in X from C. E will created M and hold all of the outstanding voting securities of M. E will invest and aggregate of approximately 20 million in M in payment for voting securities of M M will use the $20 million received from E to purchase partnership interests in X from C
It is my understanding that the purchase by M and H of partnership interests in X will not be subject to the notification and waiting requirements of the HSR Act since upon conclusion of such purchase, interests in X will be held by at least two persons (A and Z). As you have explained to me, the FTC presently considers a transaction involving transfer of interests in a partnership at the conclusion of which the interests in the partnership are held by two or more or more persons, to be neither a transfer of assets nor of voting securities. The creation of H aby P-1" would be exempt by virtue of the intra-person exemption of 802.30, regardless of whether P-1" is its own person or within the person of Z. Similarly, the creation of M by E would be exempt under 802.30.
Accordingly, as we discussed, it appears that all of the above transactions are exempt from the notification and waiting requirements of the HSR Act. I would appreciate your calling me to confirm (or further discuss) these conclusions at your earliest convenience since it is intended that these transactions close as soon as possible. [note 1]
Thanks in advance for your advice.
Very truly yours,
(Redacted)