0609012 Informal Interpretation

us-ftc-hsr-informal-interpretations-5825e7c2abad0cc2bb394658b48b1dd00609012 Informal InterpretationGuidance

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Date
Rule
802.2
Staff
Michael Verne
Response/Comments
It could be exempt under 802.2(a) if Company B constructed the project with the intent to sell it. The exemption is not compromised if the only income was from the sale of energy produced in testing, but if the project becomes operational before closing, it is not available.

Question

From:(redacted)

Sent:Monday, September 25, 2006 8:38 AM

To:Verne, B. Michael

Cc:(redacted)

Subject:HSR Advice

HiMike - I would be grateful for your advice on the following fact pattern:

CompanyA will acquire 2 "wind projects " from Company B. At the time theacquisition agreement is signed, one of the projects will be operational. Theother may still be under construction. Total consideration for the transactionis $350 million. The value of the operational project is $50 million. The valueof the larger project, which may be under construction is $300 million. It ispossible that the larger project may sell energy generated in the testingprocess prior to completion (and prior to the closing) or it could beoperational for a couple of weeks after completion, but before the closing.

Any possibility that there is an exemption here under802.2?

I look forward to hearing from you. Thanks 


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