[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR801.13]

[Page 591-592]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 801_COVERAGE RULES--Table of Contents
 
Sec. 801.13  Voting securities or assets to be held as a result of 
acquisition.

    (a) Voting securities. (1) Subject to the provisions of Sec. 
801.15, and paragraph (a)(3) of this section, all voting securities of 
the issuer which will be held by the acquiring person after the 
consummation of an acquisition shall be deemed voting securities held as 
a result of the acquisition. The value of such voting securities shall 
be the sum of the value of the voting securities to be acquired, 
determined in accordance with Sec. 801.10(a), and the value of the 
voting securities held by the acquiring person prior to the acquisition, 
determined in accordance with paragraph (a)(2) of this section.
    (2) The value of voting securities of an issuer held prior to an 
acquisition shall be--
    (i) If the security is traded on a national securities exchange or 
is authorized to be quoted in an interdealer quotation system of a 
national securities association registered with the United States 
Securities and Exchange Commission, the market price calculated in 
accordance with Sec. 801.10(c)(1); or
    (ii) If paragraph (a)(2)(i) of this section is not applicable, the 
fair market value determined in accordance with Sec. 801.10(c)(3).

    Examples: 1. Assume that acquiring person ``A'' holds $52 million of 
the voting securities of X, and is to acquire another $1 million of the 
same voting securities. Since under paragraph (a) of this section all 
voting securities ``A'' will hold after the acquisition are held ``as a 
result of'' the acquisition, ``A'' will hold $53 million of the voting 
securities of X as a result of the acquisition. ``A'' must therefore 
observe the requirements of the act before making the acquisition, 
unless the present acquisition is exempt under Section 7A(c), Sec. 
802.21 or any other rule.
    2. See Sec. 801.15 and the examples to that rule.
    3. See Sec. 801.20 and the examples to that rule.
    4. On January 1, company A acquired $60 million of voting securities 
of company B. ``A'' and ``B'' filed notification and observed the 
waiting period for that acquisition. Company A plans to acquire $1 
million of assets from company B on May 1 of the same year. Under Sec. 
801.13(a)(3), ``A'' and ``B'' do not aggregate the value of the earlier 
acquired voting securities to determine whether the acquisition is 
subject to the act. Therefore, the value of the acquisition is $1 
million and it is not reportable.

    (3) Voting securities held by the acquiring person prior to an 
acquisition shall not be deemed voting securities held as a result of 
that subsequent acquisition if:
    (i) The acquiring person is, in the subsequent acquisition, 
acquiring only assets; and
    (ii) The acquisition of the previously acquired voting securities 
was subject to the filing and waiting requirements of the act (and such 
requirements were observed) or was exempt pursuant to Sec. 802.21.
    (b) Assets. (1) All assets to be acquired from the acquired person 
shall be assets held as a result of the acquisition. The value of such 
assets shall be determined in accordance with Sec. 801.10(b).
    (2)(i) If the acquiring person has signed a letter of intent or 
entered into a contract or agreement in principle to acquire assets from 
the acquired person, and
    (ii) Subject to the provisions of Sec. 801.15, if the acquiring 
person has acquired from the acquired person within the 180 calendar 
days preceding the signing of such agreement any assets which are 
presently held by the acquiring person, and the acquisition of which was 
not previously subject to the requirements of the act or the acquisition 
of which was subject to the requirements of the act but they were not 
observed, then for purposes of the size-of-transaction tests of Section 
7A(a)(2) and for Sec. 801.1(h), both the acquiring and the acquired 
persons shall treat such assets as though they had not previously been 
acquired and are being acquired as part of the present acquisition. The 
value of any assets previously acquired which are subject to this 
paragraph shall be determined

[[Page 592]]

in accordance with Sec. 801.10(b) as of the time of their prior 
acquisition.

    Example: Acquiring person ``A'' proposes to make two acquisitions of 
assets from acquired person ``B,'' 90 days apart, and wishes to 
determine whether notification is necessary prior to the second 
acquisition. For purposes of the size-of-transaction tests in Section 
7A(a)(2), ``A'' must aggregate both of its acquisitions and must value 
each as of the time of its occurrence.

[43 FR 33537, July 31, 1978, as amended at 52 FR 7081, Mar. 6, 1987; 66 
FR 8689, Feb. 1, 2001]