2108006 Informal Interpretation

Date

August 5, 2021

Rule

801.13, 801.9

Staff

Kristin Shaffer

Response/Comments

As you know, acquisitions that are part of the same transaction must be aggregated. While we do not have all of the facts, memorializing the acquisitions into a single document indicates that they were part of an overall discussion or negotiation between the Acquiring and Acquired Persons, and thus should be aggregated. Based on what you’ve told us, aggregation would be required here even if separate agreements are now drafted. You are welcome to provide more facts and it would be important to know if there is a clean break in negotiations that decouples the acquisitions. If the parties do not view the acquisitions as part of the same transaction or negotiations and decide not to aggregate, they should be prepared to defend the position, should there be an investigation.

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Question

From: Shaffer, Kristin <kshaffer@ftc.gov>
Sent: Thursday, August 5, 2021 10:26:25 AM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp <HSRHelp@ftc.gov>
Subject: RE: Request for Informal Interpretation

[Redacted]

From: [Redacted]
Sent: Wednesday, August 4, 2021 2:40 PM
To: HSRHelp <HSRHelp@ftc.gov>
Subject: Request for Informal Interpretation

To Whom It May Concern:

We write to seek clarification with respect to the aggregation rules under the HSR Act.

Our client is considering the acquisition of three LLCs from the same Acquired Person. While memorialized in a single document, these three acquisitions are not contingent on one another. In addition, a separate transaction price is assigned to each transaction, and each transaction has separate closing conditions such that it is possible that only one of the three proposed transactions would ever close.

Under the above scenario, should the purchase price for each of the three facilities be aggregated for purposes of determining whether the HSR size-of-transaction test is satisfied?

Alternatively, if separate agreements are drafted and executed for each acquisition of an LLC—assuming there is a commercially reasonable basis for doing so, and this transaction structure is not selected solely to avoid a filing obligation under the HSR Act (and therefore does not implicate 16 CFR 801.90)—and each transaction remains not contingent on the closing of any other transaction, would aggregation of the purchases prices be required for purposes of determining whether the HSR size-of-transaction test is satisfied?

She inberg, Samuel I.
From: 	HS RH elp
Sent: 	Thursd ay, Au qu st 5, 2021 10:26 AM
To: 	Walsh, Kathryn E. ; Be r g, Karen E. ; Sheinberg, Samuel I. ; Si x, An ne; Whitehead, No ra ; Musick, Vesseli na
S ubj ect: 	FW: Request fo r Informal Interpretation
From: Shaffer, Kr istin < kshaffer@ftc.gov>
Se nt : Thursday, August 5, 2021 10:26:25 AM (UTC-05:00) Easte rn Time (US & Canada)
To:
Cc: 	e p < 	e p 	c.gov>
Subj ect : RE: Request for Informal Inte rpretation
As you know, acquisitions that are part of the same transaction must be aggregated. Whi le we do not have all of the
-facts, memoria lizing the acquisi tions i nto a single document indicates that they w ere part of an overall discussi on or
negoti at i on between the Acquiring and Acquired Persons, and thus should be aggregated. Based on w hat you've to ld us,
aggregation wou ld be required here even if separate agreements are now drafted. You are we lcome to provide mo re
facts and it wou ld be impo rtant to know if there is a clean break in negotiations that decoupl es the acquisitions. If the
part i es do not view the acquisitions as part of the same t ransaction or negot i at ions and decide not to aggregate, they
should be prepared to defend the position, should the re be an investigation.
Best regards,
Kristin
Kri st in Sh affer
Attorney
Premerger Noti fi ca t ion O ffice
Federa l Trade Commission
202- 326-2388 I kshaffer@h c.gov
From:
Sent: Wednesday, August 4, 2021 2:40 PM
To: HSRHelp <HSRHe lp@ftc.gov>
Subject : Request for Informal Inte rpr etat ion
To Whom It May Concern:
We write to seek clarification with re spect to the aggregation rnle s under the HSR Act.
Our client is conside1ing the acquisition of three LL Cs from the same Acquired Person. While memo1ialized in a single
document, these three acquisitions are no t contingent on one another. In additi on, a separa te transac tion price is assigned
to each transaction, and each transacti on has separate clo sing conditions such that it is po ss ible that only one of the three
propo se d transactions would ever clo se .
Under the above sce nario, should the purchase p1ice for each of the three fac i li tie s be aggregated for pmposes of
detemlining whether the HSR si ze-o f- transacti on test is satisfie d?
Alternative ly, if separa te agreements are draft ed and executed for each ac qui sition of an LLC- assuming there is a
commercially re aso nable basis for doing so , and this transac tion strncture is no t se lected solely to avoid a filin g obligation
under the HSR Ac t (and therefore does no t implic ate 16 CFR 80 1.90}--and each transaction remains not contingent on
the closing of any other transaction, would aggregation of the purchases prices be required for pmpo ses of de te1mining
whether the HSR si ze-o f-transaction test is satisfied ?
Th ank you for your assistance .
Be st reg ards,
1
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2108006 Informal Interpretation

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