Question
December 27, 1995
VIA FACSIMILE
Hy David Rubenstein, Esq.
Premerger Notification Office
Bureau of Competition
Federal Trade Commission,
Room 303
Sixth Street and Pennsylvania Ave., N.W.
Washington, D.C. 20580
Re: Notifications for Pending Acquisitions
Dear Mr. Rubenstein:
This letter describes a scenario for the filing of notifications under Section 7A of the Clayton Act (the "Act") that you and I discussed by telephone on December 12, 1995. The notifications will relate to the acquisitions by Company A and/or Company B of (i) assets of Partnership I, and (ii) assets of Partnership II and voting securities of P-II Corp an issuer controlled by Partnership II.
Our client, Company A, initially intends to acquire the voting securities of Company C, which owns assets in Blue City, in a transaction for which Company A and Company C have previously filed notification under the Act. Company A has also entered into contracts with Partnership I and Partnership II, pursuant to which Company A or its assignee will acquire from Partnership I and Partnership II their respective assets in Green City and the stock of P-II Corp. Company A has assigned its rights and obligations under these contracts to Company B. Pursuant to the assigned contracts. Company B will acquire the respective Green City assets of Partnership I and Partnership II together with the stock of P-II Corp.
Company A and Company B have entered into an agreement (the "Exchange Agreement") which contemplates, among other things, that after (i) Company A has acquired control of Company C, and (ii) Company B has acquired the assets comprising Partnership I's and Partnership II's respective Green City assets and the stock of P-II Corp., Company B will sell the stock and transfer the assets to Company A in exchange for the Blue City assets formerly held by Company C (the "Exchange").
Company A and Company B have agreed that if Company A does not acquire the Blue City assets, or in certain other circumstances, Company A or Company B may terminate the Exchange Agreement. If the Exchange Agreement is terminated, Company A will purchase Partnership I's and Partnership II's Green City assets (and the stock of P-II Corp.) from Partnership I and Partnership II, or from Company B if Company B has already acquired such assets and stock.
In our telephone conversation, you indicated that the FTC staff would allow Company A to submit a single filing for the assets now held by Partnership I and a single filing for the assets and voting securities now held by Partnership II, regardless of whether Company A makes the acquisitions from Partnership I and Partnership II or from Company B, as long as Company A completes the acquisitions within the time constraints of 16 C.F.R. 803.7. Although those filings would be made with respect to the potential acquisitions by Company A from Partnership I and Partnership II, they would also encompass the alternative possibility that Company A may acquire the subject assets and voting securities from Company B. Thus, a separate filing with respect to Company A's potential acquisition of those assets and securities from Company B would not be required. Accordingly, we understand that the staff will allow the parties to limit their filings for the above-described transactions to the following:
Filing No. Filing Obligation Acquired Person Filing Fee (and Statutory Payor) Acquiring Person Assets or Voting Securities 1 Company B Assets (Green City) Partnership I(1) $45,000 (Company B) 2 Company B Assets and Voting Securities (Green City) Partnership II* $45,000 (Company B) 3 Company A Assets (Green City) Partnership I $45,000 (Company A) 4 Company A Assets and Voting Securities (Green City) Partnership II $45,000 (Company A) 5 Company B Assets (Blue City) Company A $45,000 (Company B)
If this scenario does not comport with your understanding of our telephone conversation, or with the position of the Premerger Notification Office, please contact me promptly. Unless I hear from you to the contrary, I will advise Company A to rely on the understanding of its filing obligations that is set forth in this letter.
Thank you very much for your consideration.
[redacted]
[redacted]
1. With disclosure of the alternative possibility that Company A may acquire such assets (or assets and voting securities) from Company B.