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Date
Rule
801.10
Staff
Michael Verne
Response/Comments
If the contingent payments are to speculative to estimate, the acquisition price is undetermined & the value would be fair market value. The Board of the acquiring person or ?? designee would determine the FMV.

Question

From:(redacted)
Sent:Monday, August 23, 2004 6:02 PM
To:Verne, B. Michael
Subject: HSR question

Mike,

With respect to anasset deal the up front cash payment is under 50 million, but there arecontingent earn-out payments, the size of which will depend on thepost-acquisition earnings of the company being purchases. In this case, doesone treat the issue as though no sale prices has been set and look to the fairmarket value of the assets to be sold in order to determine if a filing isrequired and would the Board of the buying company make the assessment?

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.

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