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Date
Rule
801.21, 801.10
Staff
Kristin Shaffer
Response/Comments

Yes, since the cash that remains will be consideration for the sellers, it should be included in the size of transaction. 

Question

From: Shaffer, Kristin <kshaffer@ftc.gov>
Sent: Tuesday, December 21, 2021 2:27:40 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp <HSRHelp@ftc.gov>
Subject: RE: Question Regarding Determining the Size of Transaction

[Redacted]

Yes, since the cash that remains will be consideration for the sellers, it should be included in the size of transaction.

Best regards,

Kristin

Kristin Shaffer

Attorney

Premerger Notification Office

Federal Trade Commission

202-326-2388 | kshaffer@ftc.gov

From: [Redacted]
Sent: Tuesday, December 21, 2021 1:11 PM
To: HSRHelp <HSRHelp@ftc.gov>
Subject: Question Regarding Determining the Size of Transaction

We are working on a transaction targeted to occur sometime during Q1 of 2022. The expected structure of the transactions is as follows: Company A will purchase all of the non-corporate interest of Company B on a cash free/debt free basis. The cash held by Company B prior to the transaction will remain in Company B after the transaction but the amount of such cash will increase the net proceeds to the selling company. We understand that for asset purchases, pursuant to Rule 801.21, “[c]ash shall not be considered an asset of the person from which it is acquired.” However, we have the following question:

For an acquisition of non-corporate interests, in determining whether the size of transaction threshold is met, should the cash that remains in Company B (the acquired company) resulting in an increase in closing proceeds to be disbursed to the seller at closing be included in the acquisition price?

All the best.

About Informal Interpretations

Informal interpretations provide guidance from previous staff interpretations on the applicability of the HSR rules to specific fact situations. You should not rely on them as a substitute for reading the Act and the Rules themselves. These materials do not, and are not intended to, constitute legal advice.

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