Question
July 11, 2006
By FacsimileTransmission 202-326-2624
Mr.Michael Verne
PremergerNotification Office
Bureau of Competition, Room 303
Federal Trade Commission
6th Street& Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Mr. Verne:
The purpose of this letter is tosummarize our conversation earlier this morning. I advised that my client,Company A, has entered into an agreement ("Agreement 1") to acquiresubstantially all of the assets of the operating business of Company B (the"Business"), with the closing to follow in the next few months. Oneof the conditions to the closing of Agreement 1 is that the Company A will haveentered into an agreement with Company B to purchase the real property (the"Real Property") where the Business is located at the end of a fiveyear period ("Agreement 2"), During the five year interval, Company Awill lease the Real property from Company A. The rental paymentswill not affect the purchase price for the Real Property under Agreement 2.
Although dependent upon inventorylevels at closing and other factors, it is presently anticipated that the valueof the Business being acquired under Agreement 1 will be less than $56.7million for HSR purposes, while the value of the Real Property for HSR purposesunder Agreement 2 will be several million, or enough to bring the aggregatevalue of Agreements 1 and 2 to over $56.7 million for HSR purposes.
We discussed whether it would benecessary to aggregate Agreements 1 and 2 under 16 C.F.R.801.15or otherwise with a resulting requirement that an HSR filing be made. Myunderstanding is that the conclusion reached was that it will not be necessaryfor Company A to aggregate the two transactions for HSR purposes sinceAgreement 2 is not to be consummated until five years into the future. Thus,even though Agreement 1 and 2 will have been signed within 180 days, no HSRfiling by Company A is necessary with respect to the acquisition of either theBusiness or the Real Property.
If you should disagree with the conclusion expressedabove, please let me know as soon as possible. I can be reached at telephonenumber (redacted). Thank you for your assistance in this matter.