Question
From:(redacted)
Sent:Tuesday, April 20, 2004 4:50 PM
To:Verne, B. Michael
Subject: HSR question reaggregation rules
Hi Mike. We have a question aboutthe application of 801.13 and 801.14 to a transaction that I hope you can helpus with.
Our client is acquiring 100% oftwo separate companies that each have the same two UPEs - i.e. both companiesare held 50% by UPE A and 50% by UPE B. The purchase prices for the voting securitiesin each company is less than $50 million, but together the two transactionsexceed $50 million. Each of UPE A and B will get 50l0 of each of thepurchase prices, so that their respective shares are less than $50 million inaggregate.
If the UPE of the two companies tobe acquired was a single entity, I understand that the two transactions wouldbe aggregated under the reasoning explained in Interpretation 158 of the 2003Premerger Notification Practice Manual, so that the size-of-transaction wouldexceed the $50 million threshold and a filing would be required. I understandthat the basis of this reasoning is the PNO's emphasis on the value of the voting securities of theacquired person in 801.2(b) and 801.14, rather than acquired issuerin 801.13.Applying this to the case of two acquired persons, only 50% of the value ofvoting securities to be acquired can be aggregated for each of them. In thiscase, the sum of 50l0 of the purchase price for each company to beacquired would be less than $50 million, so no HSR filings would be required.
Please let me know if you agreewith this reasoning or if I have missed something here. Please give me a callif my explanation of the facts here is unclear in any way.