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0701022 Informal Interpretation
us-ftc-hsr-informal-interpretations-72319344e48ce7baf02fa7fe26fbab920701022 Informal InterpretationGuidance
Date
Rule
801.10
Response/Comments
If it is a voting securities deal, the debt would not be included in the acquisition price. It doesn't matter whether the debt is owed to the UPE or a third party creditor.
Question
From:(redacted)
Sent:Thursday, January 25, 2007 11:28 AM
To:Verne, B. Michael
Cc:(redacted)
Subject:HSR question
Dear Mr. Verne:
I amwriting to ask your advice on an HSR issue facing one of our clients. Theclient is contemplating the sale of subsidiary corporation for approximately$10 million in cash. Pursuant to the proposed sale agreement, as a condition tothe closing of the sale, the buyer would be required to pay off the existingindebtedness of the subsidiary, which totals approximately $140 million (thisdebt was not guaranteed in any way by the parent or any affiliate of theultimate parent entity of the acquired person). Would the amount of the debtbeing paid off at the closing be included in the "acquisition price"for purposes of determining whether an HSR filing is required? Would the answerto this question depend on whether or not the debt being paid off was owed tothe ultimate parent entity of the acquired person?
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