Section 800.305 - Incremental acquisitions(a) Any transaction in which a foreign person acquires an additional interest in, or for which a change in rights of the foreign person occurs with respect to, a U.S. business over which the same foreign person, or any entity that it wholly owns directly or indirectly, previously acquired direct control as a result of a covered control transaction for which the Committee concluded all action under section 721 shall be deemed not to be a covered transaction. If, however, a foreign person that did not acquire control of the U.S. business in the prior transaction is a party to the later transaction, the later transaction may be a covered transaction.(b) Examples:(1)Example 1. Corporation A, a foreign person, directly acquires a 40 percent voting interest and important rights with respect to Corporation B, a U.S. business. The documentation pertaining to the transaction gives no indication that Corporation A's interest in Corporation B may increase at a later date. Corporation A and Corporation B file a voluntary notice of the transaction with the Committee. Following its review of the transaction, the Committee informs the parties that the notified transaction is a covered control transaction, and concludes action under section 721. Three years later, Corporation A acquires the remainder of the voting interest in Corporation B. Assuming no other relevant facts, because the Committee concluded all action with respect to Corporation A's earlier direct acquisition of control in the same U.S. business, and because no other foreign person is a party to this subsequent transaction, this subsequent transaction is not a covered transaction.(2)Example 2. Corporation A, a foreign person that is not an excepted investor, makes a covered investment in Corporation B, an unaffiliated U.S. TID business, pursuant to which Corporation A acquires a five percent non-controlling equity interest in Corporation B that affords it access to material nonpublic technical information of Corporation B. Following its review of the transaction, the Committee informs the parties that the notified transaction is a covered investment, and concludes action under section 721. Two years later, Corporation A, in a subsequent investment, acquires an additional five percent non-controlling equity interest in Corporation B, which affords Corporation A the right to appoint one board member of Corporation A. The subsequent investment is a covered investment.(3)Example 3. Same facts as the example in paragraph (b)(1) of this section, except that instead of Corporation A acquiring the remainder of the voting interest in Corporation B three years after the initial acquisition, the remaining 60 percent voting interest is acquired by Corporation X. Corporation X is wholly owned by Corporation Y. Corporation Y also owns 100 percent of Corporation A. The subsequent transaction may be a covered transaction because, while Corporation A and Corporation X are both under common ownership of Corporation Y, Corporation A (the direct acquirer in the initial transaction) does not wholly own Corporation X.