Question
August 31, 2006
VIAFEDEX
PremergerNotification Office
Bureauof Competition, Room 303
FederalTrade Commission
600 Pennsylvania Avenue, N.W.
Washington, DC 20580
Attn: Nancy M. Ovuka
Re: Interpretation of 16 C.F.R. 803.9(c)
Dear Ms. Ovuka:
The purpose of this letter is to confirmour telephone conversations yesterday with respect to the number of filing feespayable, in light of the provisions of 16 C.F.R. 803.9(c) I,in connection with Notification andReport Forms filed with respect to the following transaction: Company A andCompany B intend to enter into a joint venture by contributing their respectivebusinesses to a newly formed limited liability company ("JV LLC").Each of Company A and Company B will receive a 50% interest in JV LLC inexchange for their contributions, and thus each of Company A and Company B will"control" JV LLC for purposes of the Premerger Notificationregulations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended (the "Act"). Each of Company A and Company B is, in turn,owned equally by two separate persons, and thus each of Company A and Company Bhas two (2) ultimate parent entities. As a result, the proposed transactionwould involve four (4) separate acquiring persons, and would require four (4)separate Premerger Notification and Report Forms to be filed.
The question discussed in our telephoneconversations was whether, in light of the foregoing facts, the proposedtransaction would require payment of four separate filing fees, as well, orwhether 16 C.F.R. 803.9(c) would permit a lesser number of filing fees. In particular, thequestion was whether the word "same" as used in 16 C.F.R. 803.9(c) means that the responses for both ultimate parent entities needed to beidentical in terms both of North American Industrial ClassificationSystem ("NAICS") codes, and the actual dollar amounts reported undereach NAICS code, or if "same" means that only the NAICS needed to bethe "same" (even if the actual dollars reported under the NAICS codeswere different for each filing person).
In our discussions, you agreed that for purposes ofthe above described transaction, if the responses by both of the ultimateparent entities of Company A (or by both of the ultimate parent entities ofCompany B), contained identical NAICS codes, the filings by the ultimate parententities of that Company, would be deemed the same for purposes of 16 C.F.R. 803.9(c). In that instance, while such Company's ultimate parent entities wouldeach be required to file separate Notification and Report Forms, only a singlefiling fee would be required. Thus, in the proposed transactions, if the item 5responses of both the ultimate parent entities of each of Company A and CompanyB, respectively, included identical NAICS codes, the pre-merger notificationrequirements under the Act would require four (4) separate Notification and ReportForms, but only two (2) separate filing fees, one paid by the ultimate parententities of Company A and one paid by the ultimate parent entities of CompanyB.
Please contact me if I have not accurately describedyour understanding of our telephone conversation or if you have questions orwould like any additional information. My direct line is (redacted).
1.16 C.F.R. 803.9(c): "For areportable transaction in which the acquiring entity has two ultimate parententities, both ultimate parent entities are acquiring persons; however, if theresponses for both ultimate parent entities would be the same for item 5of the Notification and Report Form, only one filing fee is required inconnection with the transaction."