Question
From:(redacted)
Sent:Friday, November 17, 2006 4:06 PM
To:Verne, B. Michael
Subject:Application of section 802.4
Mike:
I would appreciate your comments on the applicationof section 802.4 in the following transaction.
ACorp., a foreign person with substantial sales and operations in the United States,is paying $60 million for all of the outstanding voting securities of B Corp.,a United States issuer which has operations and assets in both the United Statesand Europe. It is my understanding that under sections 802.4 and 802.50(a), thefair market value of the European assets of B is deducted from the 460 millionprice in applying the Size of the Transaction Test, provided that any sales inor into the United States from B's European assets were less than $56.7 millionduring B's most recent fiscal year. This seems to be the import of Example 2 to802.4 and Informal Staff Opinion 0601024.