Question
From:
(redacted)
Sent:
Monday, November 17, 2008 11 :50 AM
To:
Verne, B. Michael
Cc:
(redacted)
Subject: Recent discussion
Mike -
This email is to confirm the conversationwe had on Thursday, November 13, 2008, during which you agreed that theproposed acquisition we described is exempt from the Hart-Scott-Rodino notice andwaiting period requirements.
The proposed acquisition would be made bya newly formed partnership controlled by the central bank of a foreign state.Although the central bank is referred to as a "joint stock company,"it is formed under specific national legislation and is restricted by itscharter to engaging in the activities typically performed by central banks. Thecentral bank's governing board is appointed by the government of the foreignstate. The central bank has nominal voting shares held by diverse shareholders--primarily political subdivisions of the foreign state, but also some privatecitizens. The shares represent a de minimis economic interest in the centralbank's assets and annual income, give extremely limited rights to vote (for example,the shareholders can approve the final annual accounts of the central bankafter those accounts have been approved by another government body) and allowno vote for the election of the governing board. We believe that the centralbank is not an "entity" under 801.1 (a)(2) because it is an agencyof a foreign government and, therefore, cannot be an "AcquiringPerson."
The central bank is not making theacquisition directly. Instead, the acquisition will be made by a newly formedpartnership that will be wholly owned --indirectly --by the central bank. (Thepartnership will acquire financial assets (some of which are troubled) from alarge commercial bank based in the foreign state; these assets are currentlyheld by the commercial bank as well as certain of its subsidiaries andbranches, some of which are located in the U.S.) Because the acquiring partywill be a partnership and not a corporation, it too is not considered an"entity" under 801.1 (a)(2).
The newly formed partnership will beowned directly by two newly formed corporations both of which will be whollyowned by the central bank. One corporation will be the general partner of thenewly formed partnership and the other will be the limited partner. The twopartners (the only two corporate entities in the ownership chain) areintermediary parties formed by the central bank to insulate the central bankin, and otherwise facilitate, this transaction and function solely to hold thepartnership interests in the actual acquiring partnership. You agreed that thetwo partners are not "engaged in commerce" under 801.1 (a)(2).
Accordingly, because under 801.1 (a)(2)no "entity" will be making an acquisition, the proposed acquisitionis exempt from the HSR requirements.
Please confirm that we have set forthaccurately our conversation.