Question
October 30, 1995
Mr. Patrick Sharp
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Dear Mr. Sharp:
This letter confirms our telephone conversation in which you advised me that the following fact pattern does not give rise to a filing obligation under the Hart-Scott-Rodino Act (the Act).
X is the acquiring person, the ultimate parent entity of which is a United States person (a citizen and resident of the United States). X proposes to enter into a series of transactions pursuant to which certain (redacted) companies (ABC), which are not commonly owned or controlled by X will acquire certain (redacted) in from Y, the acquired person whose ultimate parent entity is a (redacted) citizen and resident (Ys Parent), and X will acquire from Y the long term contract rights to all of the (redacted) the Contract), which (redacted) will be available for resale for Xs own account. Thus, ABC will (i) be (redacted) the Licenses) and (ii) receive a (redacted) the real estate, the (redacted) used in connection with the (the Assets), and X will acquire exclusive rights to the (redacted) under a contract resembling a long term lease of those rights. X would provide (redacted) consisting primarily of (redacted) which X will have (redacted) in exchange for payments by the (redacted) the Transaction).
The Licenses are issued by (redacted). The real estate (redacted) and the other Assets are located in (redacted) currently sell a total of about $10,000,000 worth of (redacted). (redacted) to United States (redacted) per year, including (redacted) last fiscal year. It is assumed that (i) X, the person acquiring the Contract, is engaged in United States commerce, (ii) the Transaction will meet the size-of-the-transaction test, and (iii) that X and Y will meet the size-of-the-parties test.
The foregoing facts do not result in a filing obligation for X under the Act because the Transaction is exempt under Section 802.50(a)(2) which, in relevant part, states:
(a) Assets. In a transaction in which assets located outside of the United States
are being acquired by a U.S. person:
(2)The acquisition of assets located outside the United States, to which sales in or into
the United States are attributable, shall be exempt from the requirements of the act unless as a result of the acquisition the acquiring person would hold assets of the acquired person to which such sales aggregating $25 million or more during the acquired persons most recent fiscal year were attributable. . .
The Licenses, the Assets and the Contract would all be assets located outside the United States because the real source of value, the Licenses, were issued by (redacted) not by the United States (redacted) more, the (redacted) not in the U.S., despite the sale of (redacted) in the United States. Accordingly, the Transaction involves assets located outside the United States. Because only $10 million are attributable to such assets in Ys last fiscal year, this Transaction is exempt under Section 802.50(a)(2).
Very truly yours,
(redacted)