Question
From:(Redacted)
To:Michael Verne (E-mail)
Date:7/9/02 8:45AM
Subject:HSR question
Mike;
Can I run an analysis by you?
Foreign company, Company A, (which has a US based sub) is acquiring Company B, also a foreign company also having a US based sub; however, Company B's primary assets are overseas and the deal primarily involves Company A's acquisition of Company B assets that are located outside of the US. Under the nexus test, acquisitions of foreign entities are exempt from HSR consideration if the foreign UPE has assets in or sales in or into the US of less than $50 million. In this case, Company B, including its US based sub, does not have assets in or sales in or into the US in excess of $50 million. Thus, I would conclude that no filing is necessary with respect to Company A's acquisition of Company B's assets.
As part of the deal, Company A will acquire stock that Company B owns in Company C. Company C is a US based private company. Company B currently owns 39% of Company C and will transfer that entire interest to Company A, which effectively will change control of Company C from Company B to Company A, although neither company has or will have holdings in excess of the 39% being transferred (i.e. neither will control 50% or more). I'd view this transaction as separate from the asset deal above with Company C as the acquired Company. Company C's assets have a FMV of $386,000 and the company has negative equity. Its sales in 2001 were approximately $1 million. This acquisition would not meet the size of transaction test.
Thus, I would conclude that neither Company A's acquisition of Company B assets or Company A's acquisition of Company C stock (from Company) would require an HSR filing.
Would you agree with this analysis?
(Redacted)