June 16, 2006

Analysis of Cross-Border SEC No-Action Letter

Earlier this week, the SEC’s Divisions of Market Regulation and Corporation Finance issued this no-action response to AstraZeneca in connection with a cross-border merger. As Jim Moloney notes, the relief granted is pretty standard for a U.K. cross-border deal of this kind.

However, the US ownership level in the target is fairly high (43.7%). Not the highest that Jim has seen – the higher the US ownership, the more reluctant the Staff tends to be in granting relief. The relief basically permits the offer to follow U.K. rules and regulations. The offer also contemplates “loan notes” as consideration for non-U.S. holders, which is fairly common as well.