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Date
Rule
801.10
Staff
Michael Verne
Response/Comments
If it is a voting securities deal, the debt would not be included in the acquisition price. It doesn't matter whether the debt is owed to the UPE or a third party creditor.

Question

From:(redacted)

Sent:Thursday, January 25, 2007 11:28 AM

To:Verne, B. Michael

Cc:(redacted)

Subject:HSR question

Dear Mr. Verne:

I amwriting to ask your advice on an HSR issue facing one of our clients. Theclient is contemplating the sale of subsidiary corporation for approximately$10 million in cash. Pursuant to the proposed sale agreement, as a condition tothe closing of the sale, the buyer would be required to pay off the existingindebtedness of the subsidiary, which totals approximately $140 million (thisdebt was not guaranteed in any way by the parent or any affiliate of theultimate parent entity of the acquired person). Would the amount of the debtbeing paid off at the closing be included in the "acquisition price"for purposes of determining whether an HSR filing is required? Would the answerto this question depend on whether or not the debt being paid off was owed tothe ultimate parent entity of the acquired person?

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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