Question
November 30, 1994
VIA FAX AND FEDERAL EXPRESS
Patrick Sharpe
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
6th & Pennsylvania Avenue, NW
Room 303
Washington, D.C. 20580
Re: Exemption for Spin-offs under 7A(c) (10) and 802.10
Dear Mr. Sharpe:
As we discussed yesterday, we represent a company (Parent) that is considering making a distributionto its shareholders of all of the outstanding stock of a wholly-owned subsidiary (Sub). No considerationwould be paid by the shareholders of Parent for the shares of Sub to be received by them, and the shares ofSub would be distributed tot he shareholders of Parent in proportion to their ownership of the stock of Parent.
You informed us that the Premerger Notification Office of the Federal Trade Commission, pursuantto a recent [note 1] Premerger Notification Office interpretation issued by John M. Sipple, Assistant Director,no longer regards distributions by a parent o its shareholders of all of the stock of a wholly-owned subsidiaryon a prop rata basis to be reportable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended. The Commission [note 2] now interprets transactions of this nature to be exempt under the Rulesthereunder. Therefore, it is our understanding that a distribution by Parent of all of the stock of Sub asdescribed above would no longer be a reportable transaction.
If our understanding is correct, please file stamp the copy of this letter and return it to me in the self-addressed and stamped envelope, both of which are enclosed in this package. If our understand is not correct,please contact me at your earliest convenience.
Sincerely,
(Redacted)
Enclosure
(redacted)