0909009 Informal Interpretation

us-ftc-hsr-informal-interpretations-df92c0c32335bd2b84c659b8886c04d10909009 Informal InterpretationGuidance

Date
Rule
802.4
Staff
James Ferkingstad
Response/Comments
Agree.

Question

From: (Redacted)
Sent: Thursday, September 17, 2009 5:32 PM
To: Ferkingstad, James H.
Cc: (Redacted)

Subject: HSRApplicability Analysis

Dear Mr.Ferkingstad:

Thank you fortaking the time this afternoon to discuss whether the transactions describedbelow are reportable under the HSR Act.

The proposed transaction:

CorporationA is a Special Purchase Acquisition Company, which is a newly formed blankcheck company that went public in 2007 and raised cash for the purpose ofeffecting a business combination with an operating business. Corporation Acurrently holds only cash. Under a proposed merger agreement among CorporationA (its own ultimate parent entity), Corporation B (a wholly-owned subsidiary ofCorporation A) and Corporation C (an entity inclined with Person D),Corporation B will merge with and into Corporation C, with Corporation Ccontinuing as the surviving corporation and a wholly-owned subsidiary ofCorporation A. Upon consummation of the merger, each of Corporation A andCorporation C will hold the assets that it held pre-merger.

PersonD is the ultimate parent entity of Corporation C, and as a result of theproposed merger will receive more than 50% of the voting securities ofCorporation A post-merger. Therefore, as a result of the merger, Person D willacquire control of Corporation A.

Giventhat the merger of Corporation B and Corporation C and the acquisition ofvoting securities of Corporation A by Person D occur simultaneously, the twotransactions should be viewed as a single acquisition in which Person Dacquires more than 50% of the voting securities of Corporation A. Therefore,Person D is the only acquiring person in the transaction.

CorporationA currently holds only cash, and cash is considered to be exempt assets under801.21. Given that the acquisition of voting securities of Corporation A byPerson D is exempt under 802.4 (as the newly acquired assets of Corporation Awill consist of assets (i.e., cash)), Person D's acquisition of the votingsecurities of Corporation A is exempt from the requirements of the HSR Act.


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