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Date
Rule
801.2, 801.50, 802.30, 802.4
Staff
Michael Verne
Response/Comments
My conclusion is that two of the transactions are reportable. 1. 1) Analyze under 801.50. UPE 2 is the acquiring person. New CA LLC is the acquired person (no filing required). UPE 1's acquisition of 50% of New CA LLC is exempt under 802.4 (UPE 2 is only contributing $52.5 MM in assets. 2) This is not an 801.50 transaction because there is only one person (UPE 2) contributing to the formation. UPE 2's formation of New OR LLC and the subsequent transfer of assets to it are exempt under 802.30. UPE 1's acquisition of 50% of New OR LLC, valued at $100 MM (half the value of the assets put into New OR LLC by UPE 2) is reportable. UPE 1 files as the acquiring person. UPE 2 files as the acquired person. 3) UPE 2 is acquiring two plants valued at $50 MM from UPE 1 in a non-reportable transaction. There is no aggregation required because all three of these transactions have different acquiring and acquired persons: Transaction 1: Acquiring person UPE 2; Acquired person New CA LLC Transaction 2: Acquiring person UPE 1; Acquired person UPE 2 Transaction 3: Acquiring person UPE 2; Acquired person UPE 1

Question

From: (redacted)

Sent: Wednesday, February 27, 2008 12:14 PM

To:Verne, B. Michael

Subject: HSR Inquiry

Mike, Thanks forreturning my call. I hope you feel better soon. Per our discussion, I'm sendingyou the structure of the three related transactions for which I am seeking HSRguidance from you.

UPE1owns two plants in Oregon and a subsidiary in California. UPE2 owns asubsidiary in Oregon and a subsidiary in California.

The three relatedtransactions are as follows:

(1)UPE1 and UPE2 are forming a newCalifornia LLC. UPE1 is contributing $200 million in assets from its Californiasubsidiary to the new LLC and UPE2 is contributing $52.5 million in assets fromits California subsidiary to the new LLC. Each will own 50% of the new LLC.

(2)UPE1 and UPE2 are forming a new OregonLLC. UPE1 is contributing nothing but is being given a 50% ownership interestin the Oregon LLC in consideration for UPE's contribution to the new CaliforniaLLC. UPE 2 is contributing $200 million in assets from its Oregon subsidiary tothe new Oregon LLC, and will also own 50% of the new Oregon LLC.

(3)UPEI is selling its two plants in Oregonto UPE2 for $25 million. These plants will be owned directly by UPE2 and not byeither of the two new LLC's. These plants are worth $50 million but are beingsold by UPE1 for only $25 million to UPE2 to balance out the interests beingconveyed between them in transactions #1 and #2 above.

Since thesetransactions are all related to one another, I would like to make just onefiling if possible. I am struggling, however, with whether I have to make oneor more filings, and who files what filing as an acquiring or acquired person. Anylight you could shed on this would be greatly appreciated, in error, pleasenotify the sender by reply e-mail and delete the message and any attachments.

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