Question
October 29, 2007
VIA E-MAIL
Mr. B. Michael Verne
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
7th & Pennsylvania Avenue, NW
Washington, DC 20580
Dear Mike:
I am writing to confirm myunderstanding of telephone conversation we had on October 25, 2007 concerning the potential reportability under theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act") of a proposedtransaction discussed below.
Proposed Transaction
The acquiring party("Buyer") intends to purchase assets consisting of a (redacted), and other facilities(collectively the "Business"). The party selling the business("Seller") is a "village" under Michigan's The General Law Village Act.Section 61.12 of that Act instructs in part "[a] village incorporatedunder this act is a body politic and corporate under the name designated for itupon incorporation." Seller also is referred to as a Michigan municipal corporation.
Seller operates the Businessunder Section 67.4 of the Act, which provides in part that "[a] village may acquire,purchase, and erect public buildings required for the use of the village, and may . . . own real estatenecessary for public grounds, . . . public buildings, and other purposesnecessary or convenient for the public good, and for the exercise of the powersconferred in this act. . . ." Seller has no separate village charter;rather it uses the Act for its authority for its actions. Seller has enacted avillage ordinance which states that the hospital (including other assetsconstituting the Business) "has been and is established as a municipalhospital, an agency of the [village], a Michigan municipal corporation."
The assets constituting the Business are directly owned by the village.The Business is not owned through a separate corporation that is owned andcontrolled by the village.
Analysis and Conclusions
You confirmed that thetransaction described above is not reportable under the HSR Act regardless of the value of thetransaction. Specifically, you confirmed:
(1) The transaction is exempt under 15 U.S.C. 18a(c)(4) which exempts "transfers toor from a Federal agency or a State or political subdivision thereof." Youagreed that Seller would be a "political subdivision" under thisstatutory exemption; and
(2) Similarly, the transaction isexempt since Seller is not an entity under 16 C.F.R. 801.1(a)(2), andacquisitions from a non-entity are not reportable under the HSR Act. See 16C.F.R. 801.1(a)(2); ABA Sectionof Antitrust Law, Premerger Notification Practice Manual (4th ed.2007) Informal Interpretations 11 & 12.