Question
February 14, 1996
Pre-merger Notification
Office Bureau of Competition
Federal Trade Commission
6th Street and Pennsylvania Avenue
Washington, D.C. 20500
Dear Mr. Sharpe:
This letter is in confirmation of our discussion today with L.L.P., regarding the following described transaction and its qualification for an exemption from the H-S-R pre-merger notification requirements.
An industrial loan company proposes to sell its entire $52 million loan portfolio to two different finance companies, one of which will be acquiring approximately $45 million of the loans.(1) The seller, which has approximately $600 million in assets, is a state chartered financial institution that engages in the business of banking and has its deposits insured by the Federal Deposit Insurance Corporation. The buyer of the larger portion is a multi-billion dollar financial services company which engages in various forms of lending. The seller, for various business reasons, has decided to discontinue this portion of its lending business and sell its loan portfolio. It will continue to originate commercial loans, consumer loans, real estate loans and other types of loans authorized for an industrial loan company.
As we understand from our discussion, the sale of the larger portion will qualify for the exemption from the pre-merger notification requirement, set forth in 12 U.S.C. Rule 18a(c)(1), as one effected in the ordinary course of business because the seller will remain in the lending business following the sale of this particular type of loan portfolio.(2) Based upon the FTC's position, the parties will proceed to consummate the transaction without making the H-S-R filing.
We would appreciate your confirming our understanding as set forth in this letter, as indicated, and returning it to me by telecopy. If you have any questions, please do not hesitate to contact me. Thank you again for your assistance.
Very truly yours,
cc
Confirmed:
________________ Patrick Sharpe Compliance Specialist
Endnotes:
1. Following our conversation, further discussion with the parties clarified certain aspects of the transaction (i.e., the size of the parties, the size of the portfolio and the number of purchasers).
2. Even if the smaller portion is aggregated with the larger portion for the H-S-R analysis, it should likewise qualify for the exemption.