Question
(redacted)
Jeffrey Kaplan, Esquire
Premerger Notification Office
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Avenue, NW, Room 303
Washington, D.C. 20580
Dear Mr. Kaplan:
The end of last week we discussed whether an acquisition I described would have to be reported under the Hart-Scott-Rodino Act. After discussing the matter, you requested that I described the factual situation in writing in order that you could be sure you understand the transaction.
The situation involves two (redacted) companies which are of size exceeding that required for reportability. One of the (redacted) companies has a wholly-owned U.S. subsidiary. The acquiring (redacted) company proposes to acquire all of the assets of the U.S. subsidiary for a sales price comprised of the Book Value of Purchased Assets as of the February 1, 1989 balance sheet, plus Canadian $6,500,000 which would be approximately U.S. $5,500,000. That payment would be designated as a premium. On February 1, 1989, the book value of the assets of U.S. subsidiary was U.S. $11,100.00.
The question I posed is whether transaction described herein is exempt from the requirements of the Act under Rule 802.51 (c), which provides:
An acquisition by a foreign person shall be exempt from the requirement of the Act if:
....
(c) The acquisition is of less than $15,000,000 of assets located in the United States (other than investment assets): or
The particular question which I posed to you was how to calculate whether the assets of the United Stated subsidiary in this situation are below $15,000.000. The U.S. subsidiary would appear to have less than $15,000,000 in assets, if one refers to Rule 801.11(c)(2) which reads:
The total assets of a person shall be as stated on that last regularly prepared balance sheet of that person.
I trust that this is the type of written description of the transaction which you sought to enable you to evaluate this question.
I look forward to hearing from you as promptly as you are able to review this matter.
Very truly yours,
cc: (redacted)