Question
Writers Direct Dial
(redacted)
September 2, 1994
Mr. Patrick Sharpe, Compliance Officer
Pre-merger Notification Office
Bureau of Competition
Room 303 - Federal Trade Commission
6th Street and Pennsylvania Ave., N.W.
Washington, D.C. 20580
Re: Pre-Merger Notification Exemptions
Dear Mr. Sharpe:
The purpose of this correspondence is to confirm our telephone conversation Friday morning, September 2, 1994.
I telephoned you to inquire relative to the applicability of 15 U.S.C. 18a(c)(10) to the following set of circumstances:
Company A owns 100% of the issued and outstanding voting securities of Company B. Company B owns 100% of the issued and outstanding voting securities of Company C. Company A desires to acquire 50% of the outstanding voting securities of Company C, by one of the following three (3) methods:
1. acquisition from Company C of its treasury stock, for a nominal consideration;
2. issuance by Company C of its previously authorized but unissued voting securities, for a nominal consideration; or
3. Purchase of 50% of the voting securities in Company C now held by Company B, for a nominal consideration.
You have informed me that there is presently no specific regulation or internal memorandum governing the described situation, but that this situation has been addressed by your department in the past. As in the past, this situation would qualify for exemption from filing a pre-merger notification with the Federal Trade Commission, under 15 U.S.C. 18a(c)(10), which provides as follows:
The following classes of transactions are exempt from the requirements of this section - * * * (1) acquisitions of voting securities, if, as a result of such acquisition, the voting securities acquired do not increase, directly or indirectly, the acquiring persons percentum share of outstanding voting securities of the issuer; . . .
I appreciate your assistance and expertise in discussing this matter. If the foregoing discussion and recollection of your conclusions and advice is in any way in error, please contact me immediately. Otherwise, please retain this letter on file as we discussed in the unlikely event that the actual transaction contemplated by our clients is called into question.
Very truly yours,
(redacted)
(redacted)
(diagram with notes)