- 13 -
Breber anticipated that both petitioner and Chemetron would
continue to produce net positive earnings and reinvest them in
accordance with the industry norm, thus increasing the value of
both the stock and the assets to be exchanged. According to Mr.
Breber, the post-closing adjustment was intended to reflect this
anticipated increase.
We find Mr. Breber's explanation of the purpose of the post-
closing adjustment to be credible and consistent with the
language of the provision itself and with the other evidence in
the record.9 Moreover, the fact that Chemetron actually
transferred an additional $3,081,584 in value after the closing
provides strong support for Mr. Breber's explanation. The only
natural conclusion is that Allegheny and Chemetron considered the
stock to have equivalent value, for it is difficult to imagine
that sophisticated businessmen were "either in effect duped into
giving * * * [an additional $3,081,584 in assets], or were
indulging in some kind of charitable exercise." Southern Natural
Gas Co. v. United States, 188 Ct. Cl. at 351, 412 F.2d at 1251.
Upon consideration of all the evidence in the record, we
conclude that the value of assets transferred by Chemetron upon
closing, including the additional $3,081,584 transferred pursuant
9We note that the acquisition of the IGD from Chemetron would make
petitioner a national, as opposed to a regional, supplier of industrial gases.
Such acquisition could not take place without FTC approval. As of the closing
date, FTC approval had been obtained, which removed this contingency. We
believe that these factors would have a positive effect on the fair market
value of petitioner's stock.
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