[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: 16CFR802.51]

[Page 611-612]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 802_EXEMPTION RULES--Table of Contents
 
Sec. 802.51  Acquisitions of voting securities of a foreign issuer.

    (a) By U.S. persons. (1) The acquisition of voting securities of a 
foreign issuer by a U.S. person shall be exempt from the requirements of 
the act unless the issuer (including all entities controlled by the 
issuer) either: holds assets located in the United States (other than 
investment assets, voting or nonvoting securities of another person, and 
assets included pursuant to Sec. 801.40(d)(2) of this chapter) having 
an aggregate total value of over $50 million; or made aggregate sales in 
or into the United States of over $50 million in its most recent fiscal 
year.
    (2) If interests in multiple foreign issuers are being acquired from 
the same acquired person, the assets located in the United States and 
sales in or into the United States of all the issuers must be aggregated 
to determine whether either $50 million threshold is exceeded.
    (b) By foreign persons. (1) The acquisition of voting securities of 
a foreign issuer by a foreign person shall be exempt from the 
requirements of the act unless the acquisition will confer control of 
the issuer and the issuer (including all entities controlled by the 
issuer) either: holds assets located in the United States (other than 
investment assets, voting or nonvoting securities of another person, and 
assets included pursuant to Sec. 801.40(d)(2) of this chapter) having 
an aggregate total value of over $50 million; or made aggregate sales in 
or into the United States of over $50 million in its most recent fiscal 
year.
    (2) If controlling interests in multiple foreign issuers are being 
acquired from the same acquired person, the assets located in the United 
States and sales in or into the United States of all the issuers must be 
aggregated to determine whether either $50 million threshold is 
exceeded.
    (c) Where a foreign issuer whose securities are being acquired 
exceeds the threshold in paragraph (b)(1) of this section, the 
acquisition nevertheless shall be exempt where:
    (1) Both acquiring and acquired persons are foreign;
    (2) The aggregate sales of the acquiring and acquired persons in or 
into the United States are less than $110 million in their respective 
most recent fiscal years;
    (3) The aggregate total assets of the acquiring and acquired persons 
located in the United States (other than investment assets, voting or 
nonvoting securities of another person, and assets included pursuant to 
Sec. 801.40(d)(2) of

[[Page 612]]

this chapter) are less than $110 million; and
    (4) The transaction does not meet the criteria of Section 
7A(a)(2)(A).

    Example to Sec. 802.51 1. ``A,'' a U.S. person, is to acquire the 
voting securities of C, a foreign issuer. C has no assets in the United 
States, but made aggregate sales into the United States of $77 million 
in the most recent fiscal year. The transaction is not exempt under this 
section.
    2. Assume that ``A'' and ``B'' are foreign persons with aggregate 
sales in or into the United States of $200 million, and that ``A'' is 
acquiring 100% of the voting securities of ``B.'' Included within ``B'' 
is U.S. issuer C, whose total U.S. assets are valued at $161 million. 
Since ``A'' will be acquiring control of an issuer, C, with total U.S. 
assets of more than $50 million, and the parties' aggregate sales in or 
into the U.S. in the relevant time period exceed $110 million, the 
acquisition is not exempt under this section.
    3. ``A,'' a foreign person, intends to acquire 100 percent of the 
voting securities of two wholly owned subsidiaries of ``B'' for a total 
of $65 million. BSUB1 is a foreign issuer with $10 million in sales into 
the U.S. in its most recent fiscal year and with assets of $10 million 
located in the U.S. $20 million of the acquisition price has been 
allocated to BSUB1. BSUB2 is a U.S. issuer with $60 million in U.S. 
sales and $60 million in assets located in the U.S. The remaining $45 
million of the acquisition price is allocated to BSUB2. Since BSUB1 does 
not exceed the $50 million limitation for U.S. sales or assets in Sec. 
802.51(b), its voting securities are not held as a result of the 
acquisition (see Sec. 801.15(b) of this chapter). Since the acquisition 
price for BSUB2 alone would not result in ``A'' holding in excess of $50 
million of voting securities of the acquired person, the transaction is 
non-reportable in its entirety. Note that the U.S. sales and assets of 
BSUB1 are not aggregated with those of BSUB2 for purposes of determining 
whether the limitations in paragraph (b) of this section are exceeded. 
If BSUB2 were also a foreign issuer, such aggregation would be required 
under paragraph (b)(2) of this section, and the transaction in its 
entirety would be reportable.

[67 FR 11904, Mar. 18, 2002; 67 FR 13716, Mar. 26, 2002]