Veritas DGC Inc. announced that it has received the requested United States Internal Revenue Service private letter ruling in connection with the previously announced merger agreement whereby Compagnie Générale de Géophysique (“CGG”) will acquire Veritas. The IRS ruled that the exchange of Veritas common stock for CGG ADSs or CGG ADSs and cash will qualify for an exception to Section 367(a)(1) of the Internal Revenue Code. As a result, Veritas and CGG expect that the material
· Stockholders who exchange Veritas common stock solely for cash in the merger generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the amount of cash received and the stockholder’s tax basis in the Veritas stock surrendered.
· Stockholders who exchange Veritas common stock solely for CGG ADSs in the merger will not recognize any gain or loss for
· Stockholders who exchange Veritas common stock for a combination of cash and CGG ADSs in the merger generally will recognize gain (but not loss) for U.S. federal income tax purposes equal to the lesser of (1) the excess of the sum of the cash and the fair market value of the CGG ADSs received over the stockholder’s tax basis in the Veritas common stock surrendered or (2) the amount of cash received.
· A stockholder’s holding period for
It should be noted that with respect to a Veritas stockholder who holds shares of Veritas common stock and will own directly, indirectly or constructively through attribution rules, at least five percent of either the total voting power or total value of the combined company’s ordinary shares immediately after the merger, the exception provided by the ruling will only apply if the stockholder files a gain recognition agreement satisfying the requirements of Section 1.367(a)-8 of the U.S. Income Tax Regulations. If you believe you could become a five-percent transferee stockholder of the combined company, you should consult your tax advisor about the applicable special rules and time-sensitive tax procedures.
The information in this press release is only a summary and does not contain all of the information that may be material to a Veritas stockholder. Please refer to “The Merger - Certain Material U.S. Federal Income Tax Consequences” of the proxy statement/prospectus dated Nov. 30, 2006 for a more complete discussion of the U.S. federal income tax consequences of the merger. Determining the actual tax consequences of the merger to a particular stockholder may be complex and will depend on the stockholder’s specific situation. Veritas stockholders are encouraged to consult their own tax advisor for a full understanding of the tax consequences of the merger.
On Sept. 5, 2006, Veritas and CGG announced that they entered into a definitive agreement for the merger. Completion of the merger remains subject to receipt of shareholders' approval, as well as the satisfaction of other customary closing conditions.
Recommended Reading
GeoPark, Vitol Sign Offtake Deal for Llanos 34 Block
2024-05-12 - Under the agreement, GeoPark will sell and deliver to Vitol a minimum of 20,000 bbl/d of oil from the Llanos 34 Block in Colombia, which GeoPark holds 45% working interest.
Magnolia Bolts-on 27,000 Acres in South Texas’ Giddings Field
2024-05-09 - Magnolia Oil & Gas said it paid $125 million to a private operator to acquire the acreage, which has minimal production.
Tetra Tech Acquires Convergence Controls & Engineering
2024-05-09 - Tetra Tech is acquiring Convergence Controls & Engineering to expand its digital water and energy offerings.
Kinetik Launches Delaware Basin M&A Valued at $1.3B
2024-05-09 - Kinetik Holdings will buy Durango Permian infrastructure for $765 million, excluding contingency payments, and sell its interests in the Gulf Coast Express pipeline to AcrLight Capital Partners for $540 million.
New Fortress Energy Acquires 1.6 GW Capacity Reserve Contract
2024-03-20 - New Fortress Energy now has over 2.2 gigawatts of contracted power at Barcarena, Brazil, after acquiring a contract from Ceiba Energy.