Question
(redacted)
June 7, 1988
PRIVILEGED AND CONFIDENTIAL
Victor L. Cohen
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Dear Mr. Cohen:
This is to confirm our telephone conversation of last week in which I asked whether the following hypothetical transactions would be reportable under the Hart-Scott-Rodino (HSR) Premerger Notification and Waiting Requirements (15 U.S.C. 18a).
First, assume Company Q, a United States corporation, plans to acquire from a foreign government (F) a 49% interest in a foreign manufacturing partnership. Company B, also a United States corporation, hold the 51% share of the partnership. Assume further that Companies A and B fulfill the size of the parties test under HSR, and the acquisition price exceeds the size of transaction test.
You advised me that under the above scenario, the acquisition from F of the 49% interest in the manufacturing partnership by Company A is not a transaction that must be reported under HSR because it is considered a reformation of a partnership. You advised that reformation of partnerships and formation of partnerships are not reportable under HSR.
Second, assume the same scenario and the same facts, except Company B buys Fs 49% interest in the partnership and then sells that interest to Company A.
You advised me that under this second scenario, company B would be required to file under HSR because the purchase from F dissolves the partnership. If, subsequent to the transfer from F to B of the 49% interest, Companies A and B formed a partnership with A holding a 49% interest and B holding a 51% interest, that transaction would not be reportable because it is considered the formation of a partnership.
Please call me at your earliest convenience if you do not agree that this letter accurately sets forth last weeks conversation and your advice to me.
Thank you very much.
Sincerely,
(Redacted)
(redacted)