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Date
Rule
801.2, 801.40
Staff
Michael Verne
Response/Comments
The only person who will hold voting securities that it did not hold prior to the transaction is B who will hold a controlling interest in A. Because pre-transaction all of A's assets are exempt, the B acquisition of A voting securities is exempt under 802.4. No current A shareholders would be required to separately file notification, because their acquisitions are exempt under 7A(c)(10). I would not treat this as an 801.40 formation.

Question

From:(redacted)

Sent:Friday, February 02, 2007 7:54 AM

To:Verne, B. Michael

Cc:(redacted)

Subject:FW: HSR Reportability

Hi Mike,

Hope all is well with you.(Redacted) and I have the following reportability question.

1. A (US non-corporate entity) incorporates foreigncorporation ("FC"). Not reportable

2.A sells some FC to B (foreignnon-corporate entity) for cash. Not reportable sale of a minority interest inFC, in addition FC has no regularly prepared balance sheet and only asset iscash.

3. FC issues additional shares to A and B for cash. Notreportable

4.B and affiliated entities hold all ofthe outstanding shares of Target (foreign corporation with US subsidiary withsufficient sales/assets to cause an HSR).

5. FC incorporates foreign corporation ("FCSub") contributes the cash. Not reportable

6.FC Sub uses the cash to purchase all ofthe outstanding share of Target from B and its affiliates in exchange for cashand FC Sub stock. Valued at over 59.8 million reportable.

6. FC Substockholders (except for FC) exchange their FC Sub stock for FC stock. Notreportable

7.So at the end of the day B and itsaffiliates will receive cash plus an interest in FC for all of their Target(Reportable as an acquisition by A of more than 59.8 million of Target votingsecurities. Not reportable by B as an acquisition of Target, prior totransaction B held more than 50% of Target, FC's only asset is Target)

8.If B will hold 50% of FC. (Still not HSRreportable as an acquisition by B, FC's only asset is stock of Target in whichB previously held more than 50%.)

Please let us knowwhether you would treat this as an 801.40 transaction or just a regularnon-801.30 HSR. Of course we are more than happy to discuss this with you ifyou think it would help.

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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