Question
From: (redacted)
Sent: Monday, September 17, 2007 4:33 PM
To: Walsh, Kathryn
Subject: HSR filinginquiry
Confidential
DearKate,
Thankyou for taking the time to discuss this transaction with me this afternoon.Here are the basic facts.
1. A, B and C are all corporations organized under the laws of F, a foreigncountry.
2. P, a corporation organized under the laws of Country F, holds more than50% of the voting shares of A and B. P holds less than 50% of the voting sharesof C, but due to its large shareholding, P is successful in appointing themajority of C's board. However, P has no contractual right to appoint themajority of C's board.
3. Y is an investment foundation created by legislation enacted by CountryF for the purpose of advancing the economic welfare of Country F's citizens.All of Y's board members are officials of the government of Country Y. Y holds99% of P's voting shares.
4. NewCorp is a corporation organized about year ago under the laws ofCountry F for the purpose of carrying out the present and subsequenttransactions. NewCorp has two, equal shareholders, both trustees holding theshares for certain charitable trusts. NewCorp's assets consist almost entirelyof cash, in an amount less than $12 million.
5. The transaction will take the following steps: 5.1: NewCorp will acquireall of the assets of A, B and C, in exchange for its own convertible preferredshares.
5.2. A, B and C will each distribute these convertiblepreferred shares to their own shareholders, and those shareholders will convertthe shares into common stock of NewCorp.
5.3.A, B and C willeach merge into NewCorp and will lose their separate identifies.
Ouranalysis of the transaction is as follows:
A.The transaction is a consolidation of A,B and C, pursuant to 801.2(d)(2).
B.P controls A and B but not C. Thereforethe Ultimate Parent Entities are P and C.
C.P and C will each be deemed bothacquiring and acquired entities, pursuant to 801.2(d)(2)(iii).
D.The transaction will be deemed anacquisition of voting shares.
E.The transaction qualifies for theexemption of 802.52, because one of the Ultimate Parent Entities, P, is controlled by the government of Country F and theacquisition is of voting securities of corporations organized under thelaws of Country F.
On thebasis of this analysis, we have concluded that the transaction is notreportable.
I wouldbe grateful if you could either confirm your agreement with this analysis orcould give me guidance on any issues that itraises.