Question
From: (REDACTED)
Sent: Tuesday, February 03, 2009 3:09 PM
To: Verne, B. Michael
Subject: 801.15 Follow-Up
Mike,
I'm writing tofollow up on the 801.15 question we just discussed.
Facts:
--Acquiringperson "X" is foreign.
--Acquiredperson "Z" is a U.S. person, and has foreign controlled subs Z-1 andZ-2. Z-1 and Z-2 have little or no U.S. sales or assets (in any event far belowUS$65.2 million).
--Xcurrently holds a non-controlling interest in Z, valued at US$50 million.
--Xalso currently holds non-controlling interests in Z-1 (valued at US$10 million)and Z-2 (valued at US$40 million).
--Xwants to exchange its shares of Z-1 for shares of Z.
As we discussed: Asa result of the exchange, X would hold $60 million in Z, and would continue tohold the non-controlling $40 million in Z-2. Under 801.15(d), X's holding inZ-2 would not be aggregated with its holding in Z because X's prior acquisitionof Z-2 was exempt under 802.51 (b) as a foreign person acquiring anon-controlling interest in a foreign issuer. Therefore no HSR filing is requiredfor the current exchange because the size of transaction is less than $65.2million.
So that I'm sure Iunderstand 801.15(d), would the result be different if Z-2 had more than US$50million (as adjusted) in U.S. sales? The prior acquisition of Z-2 would stillhave been exempt under 802.51 (b) as a foreign-to-foreign non-controlacquisition, so the $50 million (as adjusted) limitation for U.S. sales/assets would have been irrelevant. But this is precisely where the "do notapply" language in 801.15(d) puzzles me. Does this language mean thatwhere the prior acquisition was exempt because it was foreign-to-foreignnon-control (as opposed to an acquisition of control of a foreign issuer havingless than US$50 million as adjusted in U.S. sales/assets), that the shares mustbe aggregated? I find it hard to believe that would be the rule, but I wantedto confirm with you.