Question
[redacted]
April 24, 2000
Patrick Sharpe
Compliance Specialist
Federal Trade Commission
Premerger Notification Office
6th and Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Re: Nonreportability of Transaction
Dear Patrick:
This letter will confirm our telephone conversation this afternoon in which we discussed the following situation:
Company A, a multibillion multinational company, proposed acquiring approximately 1% of common voting stock in Company B, a company with a multimillion market capitalization, for over $15 million. By agreement of the parties, Company A must vote the stock in accordance with Company B's management. Company A will have no rights to board representation and Company A has no intention of taking an active management role in Company B. Company A views the investment in Company B as "strategic" and seeks to become a preferred supplier of Company B and affiliates of Company B for a service that is not a major component for Company B or its affiliates' services. There is not present obligation, however, that Company B or its affiliates actually purchase such services from Company A.
Based on the above facts, you agreed that the acquisition of the Company B voting securities by Company A would be nonreportable under 16 C.F.R. 802.9 since it is being made solely for investment purposes. Please call me immediately if I have in any way misunderstood your advice in this regard.
As always, I appreciate your assistance. Best personal regards.
Sincerely,
[redacted]