Skip to main content
Date
Rule
Item 5
Staff
Michael Verne
Response/Comments
There is no requirement that B provide information on the entities it plans to acquire if A closes on the A accusation of B voting stock first.

Question

From: [redacted]

To: FTC.SERIUS ("mverne@)

Date: Mon, Oct 30, 2000 4:03 PM

Subject: Quick HSR Questions

Mike:

Here is a novel little question regarding the content of a Premerger Notification and Report filing on a unusual set of facts.

A is a natural person. B is a newly formed corporation that is its own UPE and does not have a regularly prepared balance sheet. A and B plan to enter into an agreement pursuant to which A will invest more than $15 million in B corporation in exchange for a minority of B's voting securities in a reportable transaction. A is only willing to invest the money, however, if B agrees that "substantially concurrently" with A's acquisition of B's voting securities, B will purchase several other companies that provide a certain minimum amount of earning based on year 2000 projections. These other transactions may or may not be independently reportable under HSR.

Assuming that b close on its other deals before it sells it voting securities to A, B would need to include information about the other entities it has purchased in its HSR filing for A's acquisition of its voting securities, (e.g., Items 4, 5. 6, etc.). Assuming that a purchases the voting securities from B before B closes on its other planned acquisitions, however, must B include in its HSR filing for its sale of voting securities to A information about the other entities that B will acquire immediately after its sale of voting securities to A?

As always, I appreciate your feedback.

[redacted]

[redacted]

Contents privileged, If this message has been receive in error, please destroy it without reading. This message should not be forwarded without permission of the author.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. 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.