Exhibit 8.2
_________________________
IRELL & MANELLA LLP
_________________________
1800 AVENUE OF THE STARS
SUITE 900
LOS ANGELES, CALIFORNIA 90067-4276
(310) 277-1010
July 17, 1996
Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067-3101
Gentlemen:
We have acted as counsel to Teledyne, Inc., a corporation organized
under the laws of the State of Delaware ("TI"), in connection with the proposed
merger (the "Merger") of TDY Merger, Inc., a corporation organized under the
laws of the State of Delaware ("TI Merger Sub") and a wholly owned subsidiary of
Allegheny Teledyne Incorporated, a corporation organized under the laws of
Delaware ("ATI"), with and into TI. You have requested our opinion regarding the
U.S. federal income tax consequences of the Merger.
In rendering our opinion, we have reviewed the Agreement and Plan of
Merger and Combination, as amended and restated, dated as of April 1, 1996, by
and among ATI, Allegheny Ludlum Corporation, a Pennsylvania corporation ("ALC"),
ALS Merger Corporation, a Pennsylvania corporation and wholly owned subsidiary
of ATI, TI and TI Merger Sub, relating to the Merger (the "Combination
Agreement"), the Joint Proxy Statement/Prospectus to stockholders of TI and ALC
(the "Proxy Statement/Prospectus"), and such other materials as we have deemed
necessary or appropriate as a basis for our opinion.
In rendering this opinion, we have assumed that the Merger will be
consummated in accordance with the Combination Agreement and that the Proxy
Statement/Prospectus accurately reflects the material facts of the Merger and
those
Teledyne, Inc.
July 17, 1996
Page 2
surrounding TI, TI Merger Sub and ATI. In addition, as to any facts material to
this opinion which we did not independently establish or verify, we have relied
upon the facts contained in the statements and representations of officers and
other representatives of TI, TI Merger Sub, ATI and others, which facts may in
certain instances derive from the best knowledge of such persons without duty of
inquiry. Such representations of TI are attached hereto as Exhibit A and such
representations of ATI and TI Merger Sub are attached hereto as Exhibit B.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986 (the "Code"), Treasury regulations,
pertinent judicial authorities, rulings of the Internal Revenue Service, and
such other authorities as we have considered relevant.
Based upon the foregoing, it is our opinion that, under present law, for
U.S. federal income tax purposes the Merger pursuant to which the shares of
common stock of TI held by the stockholders of TI will be converted into shares
of the common stock of ATI will be treated as a reorganization within the
meaning of Section 368(a) of the Code. We further confirm, based on the
foregoing, our opinion as set forth (subject to the qualifications and
limitations as also set forth) under the heading "Certain Federal Income Tax
Consequences" in the Proxy Statement/Prospectus. Other than as expressly set
forth above, we express no opinion as to the U.S. federal, state, local, foreign
or other tax consequences of the Merger to any particular stockholder of TI.
Any material changes in the facts from those set forth or assumed herein
or in the Proxy Statement/Prospectus may affect the conclusions stated herein.
We hereby consent to the filing of this opinion as an exhibit to the
Form S-4 and to the reference to us under the caption "THE COMBINATION - Certain
Federal Income Tax Consequences" in the Proxy Statement/Prospectus forming part
of the Form S-4 and any amendments thereto. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Teledyne, Inc.
July 17, 1996
Page 3
Very truly yours,
/s/ Irell & Manella LLP
Exhibit A
TELEDYNE, INC.
2049 Century Park East
Los Angeles, CA 90067-3101
July 17, 1996
Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Dear Sirs:
In connection with the opinion to be delivered by you pursuant to the
Agreement and Plan of Merger and Combination, as amended and restated, dated as
of April 1, 1996 (the "Combination Agreement"), by and among Allegheny Teledyne
Incorporated, a Delaware corporation ("ATI"), Allegheny Ludlum Corporation, a
Pennsylvania corporation ("ALC"), ALS Merger Corporation, a Pennsylvania
corporation and wholly owned subsidiary of ATI, Teledyne, Inc., a Delaware
corporation ("TI") and TDY Merger, Inc., a Delaware corporation and wholly owned
subsidiary of ATI ("TI Merger Sub"), relating to the proposed merger (the
"Merger") of TI Merger Sub with and into TI, and recognizing that you will rely
on this letter in rendering said opinion, the undersigned, a duly authorized
officer of TI and acting as such, hereby certifies that to the best knowledge of
the undersigned after reasonable inquiry, the facts relating to the Merger as
described in the Combination Agreement and the Joint Proxy Statement/Prospectus,
dated July 17, 1996, including attachments thereto, are true, correct and
complete in all material respects and hereby certifies, to the best knowledge of
the undersigned after reasonable inquiry, to the following as of the date
hereof. References herein only to the "knowledge" of any person are to such
person's (or management's in the case of an entity) actual knowledge without
duty of inquiry. Insofar as such certification pertains to any person other
than TI and any of its subsidiaries, the voting stock of which TI owns at least
eighty percent (80%) (an "Affiliate"), such certification is only as to the
knowledge of the undersigned without specific inquiry. We understand that you
will reaffirm your opinion at the Closing and that, in connection with such
reaffirmation, you will require that we reaffirm this certification as of that
time.
Capitalized terms in this letter shall have the same meanings ascribed to
them in the Combination Agreement unless otherwise specified herein.
A. Representations. TI hereby certifies, warrants, and represents that
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the following facts are now true and will continue to be true as of the Closing
Date and as of the Effective Time:
1. The Merger will be consummated in accordance with the material terms of
the Combination Agreement and none of the material conditions therein have been
waived or modified and TI has no plan or intention to waive or modify any such
material conditions.
2. The ratio for the exchange of shares of common stock of TI (the "TI
Common Stock") for common stock of ATI (the "ATI Common Stock") in the Merger
was negotiated through arm's length bargaining.
3. There is no present plan or intention (a "Plan") on the part of the
stockholders of TI who own five percent (5%) or more of the TI stock, and to the
best of the knowledge of the management of TI, there is no Plan on the part of
the remaining shareholders, to engage in a sale, exchange, transfer, reduction
of risk of ownership or any other direct or indirect disposition (a "Sale") of
(i) shares of ATI Common Stock to be issued to them in the Merger, which shares
have an aggregate fair market value, as of the period ending at the Effective
Time, in excess of fifty percent (50%) of the aggregate fair market value,
immediately prior to the Merger, of the outstanding shares of TI Common Stock
held by shareholders immediately prior to the Merger ("Outstanding TI Common
Stock") (including shares of TI Common Stock issued after the date hereof and
prior to the Effective Time pursuant to exercise of options to acquire TI Common
Stock issued to present or former employees or directors of TI in the ordinary
course of business (the "TI Options")), or (ii) more than fifty percent (50%) of
the shares of ATI Common Stock received by such stockholders in the Merger. For
purposes of the foregoing, a Sale of ATI Common Stock shall be considered to
have occurred pursuant to a Plan if such Sale occurs in a transaction that is in
contemplation of or related to the Merger (a "Related Transaction"). In
addition, shares of TI Common Stock (or the portion thereof) (i) exchanged for
cash in lieu of fractional shares of ATI Common Stock or (ii) with respect to
which a Sale occurred in a Related Transaction prior to the Merger shall be
considered to have been Outstanding TI Common Stock that was exchanged for ATI
Common Stock in the Merger and then disposed of pursuant to a Plan.
4. Immediately following the Merger and all Related Transactions, TI will
hold at least 90 percent of the fair market value of its net assets and at least
70 percent of the fair market value of its gross assets, and at least 90 percent
of the fair market value of TI Merger Sub's net assets and at least 70 percent
of the fair market value of TI Merger Sub's gross assets held immediately prior
to the Merger (or, if earlier, immediately prior to any Related Transaction).
For purposes of this representation, amounts paid by TI or TI Merger Sub to pay
reorganization expenses and all redemptions and distributions (except for
regular, normal dividends) made by TI will be included as assets of TI or TI
Merger Sub, respectively, immediately prior to the Merger (or, if earlier,
immediately prior to any Related Transaction).
5. TI has made no transfer of any of its assets in contemplation of the
Merger or during the pre-Merger period other than in the ordinary course of
business.
6. TI has no obligation, understanding, agreement, plan or intention to
issue additional shares of its stock that would result in ATI losing control of
TI within the meaning of Section 368(c) of the Internal Revenue Code of 1986, as
amended (the "Code") (control within the meaning of Section 368(c) of the Code
is hereinafter referred to as "Control").
7. To the knowledge of TI, ATI has no plan or intention to reacquire any
of its stock issued in the Merger.
8. To the knowledge of TI, ATI has no plan or intention to liquidate TI;
to merge TI with or into another corporation; to sell or otherwise dispose of
the stock of TI; or to cause TI to sell or otherwise dispose of any of its
assets or of any of the assets acquired from TI Merger Sub, except for
dispositions made in the ordinary course of business or transfers of assets to a
corporation controlled by TI.
9. To the knowledge of TI, following the Merger and all Related
Transactions, ATI will cause TI to continue its historic business or use a
significant portion of its historic business assets in a business.
10. ATI, TI Merger Sub, TI, and the shareholders of TI will each pay their
respective expenses, if any, incurred in connection with the Merger and all
Related Transactions.
11. There is no intercorporate indebtedness existing between ATI and TI or
between TI Merger Sub and TI that was issued, acquired, or will be settled at a
discount.
12. In the Merger, shares of TI stock representing Control of TI will be
exchanged solely for voting stock of ATI. For purposes of this representation,
shares of TI stock exchanged for cash or other property originating with ATI
will be treated as outstanding TI stock on the date of the Merger. Moreover,
for purposes of this representation, in the case of ATI shares issued in the
Merger and reacquired in a Related Transaction, the TI shares to which such ATI
shares are attributable will be treated as having been exchanged in the Merger
for other than voting stock.
13. At the Effective Time, TI will not have outstanding any warrants,
options, convertible securities, or any other type of right pursuant to which
any person could acquire stock in TI that, if exercised or converted, would
affect ATI's acquisition or retention of Control of TI.
14. ATI does not own, nor has it owned during the past five years, any
shares of the stock of TI.
15. TI is not an "investment company" as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
16. On the date of the Merger, the fair market value of the assets of TI
will exceed the sum of its liabilities, plus the amount of liabilities, if any,
to which such assets are subject.
17. TI is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
18. The liabilities of TI have been incurred by TI in the ordinary course
of its business.
19. The payment of cash in lieu of fractional shares of ATI stock is
solely for the purpose of avoiding the expense and inconvenience to ATI of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the
transaction to shareholders of TI instead of issuing fractional shares of ATI
stock will not exceed one percent of the total consideration that will be issued
in the transaction to the shareholders of TI in exchange for their shares of TI.
The fractional share interests of each shareholder of TI will be aggregated, and
no shareholder of TI will receive cash in an amount equal to or greater than the
value of one full share of ATI stock.
20. None of the compensation received by any shareholder-employee of TI
will be separate consideration for, or allocable to, any of their shares of TI
stock; none of the shares of ATI stock received by any shareholder-employees
will be separate consideration for, or allocable to, any employment agreement;
and the compensation paid to any shareholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services.
B. Reliance by You in Rendering Opinions; Limitations on Your Opinions.
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1. TI recognizes that (i) your opinions will be based on the
representations set forth herein, and on the statements contained in the
Combination Agreement and the documents related thereto and (ii) your opinions
will be subject to certain limitations and qualifications including without
limitation that they may not be relied upon if any such representations are not
accurate.
2. TI recognizes that your opinions will not address any tax consequences
of the Merger or any action taken in connection therewith except as expressly
set forth in such opinions.
Very truly yours,
TELEDYNE, INC.
a Delaware corporation
By: /s/ Douglas J. Grant
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Title: Treasurer and Chief Financial Officer
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Exhibit B
ALLEGHENY TELEDYNE INCORPORATED
1000 Six PPG Place
Pittsburgh, PA 15222
July 17, 1996
Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Dear Sirs:
In connection with the opinion to be delivered by you pursuant to the
Agreement and Plan of Merger and Combination, as amended and restated, dated as
of April 1, 1996 (the "Combination Agreement"), by and among Allegheny Teledyne
Incorporated, a Delaware corporation ("ATI"), Allegheny Ludlum Corporation, a
Pennsylvania corporation ("ALC"), ALS Merger Corporation, a Pennsylvania
corporation and wholly owned subsidiary of ATI, Teledyne, Inc., a Delaware
corporation ("TI") and TDY Merger, Inc., a Delaware corporation and wholly owned
subsidiary of ATI ("TI Merger Sub"), relating to the proposed merger (the
"Merger") of TI Merger Sub with and into TI, and recognizing that you will rely
on this letter in rendering said opinion, the undersigned, duly authorized
officers of ATI and TI Merger Sub, respectively, and acting as such, hereby
certify that to the best knowledge of the undersigned after reasonable inquiry,
the facts relating to the Merger as described in the Combination Agreement and
the Joint Proxy Statement/Prospectus, dated July 17, 1996, including attachments
thereto, are true, correct and complete in all material respects and hereby
certify, to the best knowledge of the undersigned after reasonable inquiry, to
the following as of the date hereof. The undersigned also recognize that TI
will rely on the representations contained in this letter to the extent such
representations relate to ATI and TI Merger Sub. References herein only to the
"knowledge" of any person are to such person's (or management's in the case of
an entity) actual knowledge without duty of inquiry. Insofar as such
certification pertains to any person other than ATI and any of its subsidiaries,
the voting stock of which ATI owns at least eighty percent (80%) (an
"Affiliate"), such certification is only as to the knowledge of the undersigned
without specific inquiry. We understand that you will reaffirm your opinion at
the Closing and
that, in connection with such reaffirmation, you will require that we reaffirm
this certification as of that time.
Capitalized terms in this letter shall have the same meanings ascribed to
them in the Combination Agreement unless otherwise specified herein.
A. Representations. ATI and TI Merger Sub each hereby certifies,
---------------
warrants, and represents, with respect to itself, as applicable, that the
following facts are now true and will continue to be true as of the Closing Date
and as of the Effective Time:
1. The Merger will be consummated in accordance with the material terms of
the Combination Agreement and none of the material conditions therein have been
waived or modified and TI has no plan or intention to waive or modify any such
material conditions.
2. The ratio for the exchange of shares of common stock of TI (the "TI
Common Stock") for common stock of ATI (the "ATI Common Stock") in the Merger
was negotiated through arm's length bargaining.
3. To the knowledge of ATI and TI Merger Sub, there is no present plan or
intention (a "Plan") on the part of the stockholders of TI to engage in a sale,
exchange, transfer, reduction of risk of ownership or any other direct or
indirect disposition (a "Sale") of (i) shares of ATI Common Stock to be issued
to them in the Merger, which shares have an aggregate fair market value, as of
the period ending at the Effective Time, in excess of fifty percent (50%) of the
aggregate fair market value, immediately prior to the Merger, of the outstanding
shares of TI Common Stock held by shareholders immediately prior to the Merger
("Outstanding TI Common Stock") (including shares of TI Common Stock issued
after the date hereof and prior to the Effective Time pursuant to exercise of
options to acquire TI Common Stock issued to present or former employees or
directors of TI in the ordinary course of business (the "TI Options")), or (ii)
more than fifty percent (50%) of the shares of ATI Common Stock received by such
stockholders in the Merger. For purposes of the foregoing, a Sale of ATI Common
Stock shall be considered to have occurred pursuant to a Plan if such Sale
occurs in a transaction that is in contemplation of or related to the Merger (a
"Related Transaction"). In addition, shares of TI Common Stock (or the portion
thereof) (i) exchanged for cash in lieu of fractional shares of ATI Common Stock
or (ii) with respect to which a Sale occurred in a Related Transaction prior to
the Merger shall be considered to have been Outstanding TI Common Stock that was
exchanged for ATI Common Stock in the Merger and then disposed of pursuant to a
Plan.
4. Prior to the Merger, ATI will be in control of TI Merger Sub within the
meaning of Section 368(c) of the Internal
Revenue Code of 1986, as amended (the "Code") (control within the meaning of
Section 368(c) of the Code is hereinafter referred to as "Control").
5. ATI has no plan or intention to cause TI to issue additional shares of
stock after the Merger, or take any other action, that would result in ATI
losing Control of TI.
6. ATI has no plan or intention to reacquire any of its stock issued in
the Merger.
7. ATI has no plan or intention to liquidate TI; to merge TI with or into
another corporation; to sell or otherwise dispose of the stock of TI; or to
cause TI to sell or otherwise dispose of any of its assets or of any of the
assets acquired from TI Merger Sub, except for dispositions made in the ordinary
course of business or transfers of assets to a corporation controlled by TI.
8. The liabilities of TI Merger Sub, if any, assumed by TI and the
liabilities, if any, to which the transferred assets of TI Merger Sub are
subject were incurred by TI Merger Sub in the ordinary course of its business.
9. Following the Merger and all Related Transactions, TI will continue its
historic business or use a significant portion of its historic business assets
in a business.
10. ATI, TI Merger Sub, TI, and the shareholders of TI will each pay their
respective expenses, if any, incurred in connection with the Merger and all
Related Transactions.
11. There is no intercorporate indebtedness existing between ATI and TI or
between TI Merger Sub and TI that was issued, acquired, or will be settled at a
discount.
12. In the Merger, shares of TI stock representing Control of TI will be
exchanged solely for voting stock of ATI. For purposes of this representation,
in the case of ATI shares issued in the Merger and reacquired in a Related
Transaction, the TI shares to which such ATI shares are attributable will be
treated as having been exchanged in the Merger for other than voting stock.
13. ATI does not own, nor has it owned during the past five years, any
shares of the stock of TI.
14. Neither ATI nor TI Merger Sub is an "investment company" as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
15. To the knowledge of ATI and TI Merger Sub, on the date of the Merger,
the fair market value of the assets of TI
will exceed the sum of its liabilities, plus the amount of liabilities, if any,
to which such assets are subject.
16. The payment of cash in lieu of fractional shares of ATI stock is
solely for the purpose of avoiding the expense and inconvenience to ATI of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the
transaction to shareholders of TI instead of issuing fractional shares of ATI
stock will not exceed one percent of the total consideration that will be issued
in the transaction to the shareholders of TI in exchange for their shares of TI.
The fractional share interests of each shareholder of TI will be aggregated, and
no shareholder of TI will receive cash in an amount equal to or greater than the
value of one full share of ATI stock.
17. None of the compensation received by any shareholder-employee of TI
will be separate consideration for, or allocable to, any of their shares of TI
stock; none of the shares of ATI stock received by any shareholder-employees
will be separate consideration for, or allocable to, any employment agreement;
and the compensation paid to any shareholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services.
B. Reliance by You in Rendering Opinions; Limitations on Your Opinions.
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1. ATI and TI Merger Sub each recognizes that (i) your opinions will be
based on the representations set forth herein, and on the statements contained
in the Combination Agreement and the documents related thereto and (ii) your
opinions will be subject to certain limitations and qualifications including
without limitation that they may not be relied upon if any such representations
are not accurate.
2. ATI and TI Merger Sub each recognizes that your opinions will not
address any tax consequences of the Merger or any action taken in connection
therewith except as expressly set forth in such opinions.
Very truly yours,
ALLEGHENY TELEDYNE INCORPORATED
a Delaware corporation
By: /s/ William P. Rutledge
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Title: President and Chief Executive Officer
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TDY MERGER, INC.
a Delaware corporation
By: /s/ Douglas J. Grant
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Title: Treasurer
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