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Date

Tags:

Rule
801.2, continuum
Staff
Kate Walsh
Response/Comments

We apply continuum in a limited set of circumstances.  A typical scenario is a reorganization followed by an acquisition where there are a number of steps in the reorganization that each trigger a filing, but we only ask for one filing at the end of the process to capture the acquisition.

We do also see this circumstance a great deal: A is buying B, and B is buying C.  We have permitted A to file for the C acquisition as if it already holds B, as long as A has also filed to acquire B.  This is not continuum.

So, we don’t think your scenario fits into continuum, and we need two filings.

Question

From: Walsh, Kathryn E.
Sent: Tuesday, December 01, 2015 12:35 PM
To: [REDACTED]; Gillis, Diana L.; Whitehead, Nora; Berg, Karen E.
Subject: RE: Application of Continuum Theory

 

[REDACTED]:

We apply continuum in a limited set of circumstances.  A typical scenario is a reorganization followed by an acquisition where there are a number of steps in the reorganization that each trigger a filing, but we only ask for one filing at the end of the process to capture the acquisition.

We do also see this circumstance a great deal: A is buying B, and B is buying C.  We have permitted A to file for the C acquisition as if it already holds B, as long as A has also filed to acquire B.  This is not continuum.

So, we don’t think your scenario fits into continuum, and we need two filings.

Kate

From: [REDACTED]
Sent: Tuesday, November 24, 2015 4:37 PM
To: Gillis, Diana L.; Whitehead, Nora; Walsh, Kathryn E.; Berg, Karen E.
Subject: Application of Continuum Theory

Nora, Diana, Kate, and Karen,

Through two agreements, A will acquire a controlling stake in B (Agreement 1) and B will acquire D from C (Agreement 2), with the acquisition of D by B funded in part with funds invested by A as consideration for A acquiring its controlling stake in B.  Each of  the A acquisition of B and the B acquisition of D separately trigger HSR.  Both transactions are expected to close same day. Agreement 1 is conditional upon the simultaneous close of the acquisition contemplated by Agreement 2.  Although Agreement 2 is not explicitly conditional on Agreement 1, in fact if A does not invest cash in B as contemplated in Agreement 1 then the close contemplated in Agreement 2 likely will not take place, unless B receives sufficient funds to cover the purchase price for D from other sources. Under the continuum theory I understand that we can make one acquiring person filing with A as the UPE of B and B as the acquiring entity in the acquisition of D, and one acquired person filing with C filing as the acquired UPE selling D to B (whose UPE is A).  Do you agree?

 Many thanks,

[REDACTED]

About Informal Interpretations

Informal interpretations provide guidance from PNO staff on the applicability of the HSR rules to specific fact situations. They do not necessarily reflect the position of the Commission. 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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