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to compete. Petitioners' reliance on Republic Petroleum Corp. v.
United States, 397 F. Supp. 900, 919-920 (E.D. La. 1975), affd.
in part and revd in part 613 F.2d 518 (5th Cir. 1980), is
misplaced as that case involved only the acquisition of a single
asset, stock.
Nor are we impressed with petitioners' attempt to salvage
their position by asserting that the excess value involved herein
represented an expenditure by Metals to discharge an obligation
incurred in furtherance of a business purpose of its own.
Petitioners argue that Metals incurred the exchange
obligation, and subsequently made the stock outlay on its own
behalf, because it sought to increase its supply of Canadian
aluminum. It is, however, more accurate to state that Metals
guaranteed the exchange of its stock so as to make RMECC's
debentures marketable in the Eurobond market,8 the sale of which
enabled RMECC to acquire a majority of CBA's stock while BA, 48
percent owned by Metals, was able to raise cash to build new
aluminum plants by selling its CBA stock to RMECC. The link that
petitioners fail to explain is why holding an 83-percent interest
in CBA, through RMECC, its 100-percent owned subsidiary, improved
its supply of Canadian aluminum as compared to when Metals owned
8 For discussion of the Eurobond market see New York State Bar
Association, Tax Section, Committee on U.S. Activities of Foreign
Taxpayers, "The Withholding of Tax on Interest Paid by U.S.
Borrowers to Foreign Lenders," 6 Intl. Tax J. 126, 127 (1979).
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