0609001 Informal Interpretation

us-ftc-hsr-informal-interpretations-b9db60b4e16877940fa46ac1fe7de87e0609001 Informal InterpretationGuidance

Date
Rule
801.4
Staff
Michael Verne
Response/Comments
Yes This is a potentially reportable secondary acquisition, N. Ovuka concurs.

Question

From:(redacted)

Sent:Wednesday, September 06, 2006 5:16 PM

To:Verne, B. Michael

Subject:Question

HiMike. I'm drawing a blank and need your help.

Aand B propose to form Newco. A will contribute voting securities of C valued inexcess of $56.7 million and will take back 100% of the nonvoting securities ofNewco. B will contribute $100 and take back the one and only share of votingstock of Newco. Accordingly, A will hold most of the equity, but no votingsecurities of Newco. B will hold all of the voting securities of Newco, butvirtually no equity. I understand that the formation of Newco will not requirea filing even if the size of person test is satisfied because neither A nor Bwill hold voting securities of Newco valued in excess of $56.7 million. Icannot recall, though, whether a secondary acquisition filing obligation canarise in the context of the formation of a joint venture corporation. As aresult of its acquisition of the one and only share of voting stock of Newco, Bwill be deemed to hold the shares of C that A has contributed to Newco. Theseshares are valued in excess of $56.7 million. If B and C meet size of person,does

B have a filing obligationfor its indirect acquisition of this minority interest in C?


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