Question
August 5, 2002
By Facsimile
Nancy M. Ovuka, Esq. [sic]
Premerger NotificationOffice
Room 303
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C.20580
Re: Request for Informal Interpretation Underthe HSR Act
Dear Ms. Ovuka:
Many thanks for speaking with me this morning regarding the potential applicabilityof the HSR premerger notification requirements to a proposed transaction.I write to confirm the substance of our telephone conversation, at the end ofwhich you had agreed that it would not be necessary for the parties to file inconnection with the transaction under the filing exemption provided in section7A(c)(1) of the Act.
As we discussed, our client, A, is a wholly-owned indirect subsidiary of alarge, U.S.-based insurance and financial services company. A is engaged in theconsumer finance business. A proposes to purchase a portfolio of consumer loanswith a book value of approximately $220 million. The portfolio of consumerloans that would be involved in the transaction is comprised of real estate andother types of consumer secured loans and unsecured loans- No credit cardreceivables are included in the portfolio.
A is currently engaged in consumer lending and will continue to be so engagedfollowing the proposed transaction. The proposed transaction representsan expansion of A's current activities.
The ultimate parent of the seller of the loan portfolio, B, is a bank holdingcompany. The seller is a national banking association. The assets being soldconstitute substantially all of the assets of one of its operating divisions.Upon the consummation of the proposed transaction, the operating divisionholding the assets being purchased will cease operations in its present form,but the seller will continue to be engaged in consumer lending.
In addition to purchasing the consumer loan portfolio, A will acquire certainbusiness assets from the seller, such as furniture, fixtures, and equipment atapproximately 38 branches of the seller which generated the lean portfolio. Thevalue of the furniture, fixtures, and equipment at these locations isapproximately $1 million. A will also assume the existing leases withrespect to these branch offices. The value of this lease assumption isapproximately $1.7 million.
A also intends to interview all employees in the branch offices who may desireemployment and to offer positions to as many branch personnel as possible,consistent with staffing needs. However, in view of A's primary purposeto acquire the loan portfolio and expand its current business, it is not acondition to the proposed transaction that any employees of the seller agree towork for A in the future.
Based on my discussion with you, I understand that the proposedtransaction is exempt under the exemption provided in section 7A(c)(1) of theAct. I would be grateful if you could call me at (Redacted) after youhave had an opportunity to review this letter to confirm t it accuratelyreflects our conversation.
Thank you again for your prompt attention and assistance this morning and foryour further assistance in reviewing and responding to this letter.