[Federal Register Volume 60, Number 153 (Wednesday, August 9, 1995)]
[Rules and Regulations]
[Pages 40704-40710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19546]
[[Page 40703]]
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Part IV
Federal Trade Commission
_______________________________________________________________________
16 CFR Parts 800 and 803
Notification and Report Form for Certain Mergers and Acquisitions Under
the Antitrust Improvements Act; Final Rule
Federal Register / Vol. 60, No. 153 / Wednesday, August 9, 1995 /
Rules and Regulations
[[Page 40704]]
FEDERAL TRADE COMMISSION
16 CFR Parts 800 and 803
Notification and Report Form for Certain Mergers and Acquisitions
Under the Antitrust Improvements Act
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: This final rule revises 16 CFR part 803 Appendix, the
Antitrust Improvements Act Notification and Report Form for Certain
Mergers and Acquisitions (the ``Form''). The Form must be completed and
submitted by persons required to report mergers or acquisitions
pursuant to Section 7A of the Clayton Act as added by title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (``HSR Act''). The
revised Form will require that 1992 revenue data, identified by 1987
Bureau of the Census Standard Industrial Classification (SIC) Codes, be
provided in response to certain items on the Form that previously
called for 1987 data. This final rule also removes 16 CFR part 800, the
Transitional Rule addressing the treatment of acquisitions consummated
before, and notifications filed on or before, September 5, 1978, the
effective date of the Form and the rules implementing the HSR Act
(``the Rules'').
EFFECTIVE DATE: August 9, 1995.
ADDRESSES: All completed Forms, including any documents required to be
submitted in response to any item on the Form, must be delivered to:
Premerger Notification Office, Bureau of Competition, Room 303, Federal
Trade Commission, Washington, DC 20580, and Director of Operations,
Antitrust Division, Room 3218, Department of Justice, Washington, DC
20530, as specified by 16 CFR 803.10(c).
FOR FURTHER INFORMATION CONTACT:
William I. Schechter, Attorney, or Melea R. Epps, Attorney, Premerger
Notification Office, Bureau of Competition, Room 303, Federal Trade
Commission, Washington, DC 20580. Telephone (202) 326-3100.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
This change to the Form has been approved by the Office of
Information and Regulatory Affairs, Office of Management and Budget,
under the existing OMB clearance, Control No. 3084-0005.
Regulatory Flexibility Act
The Federal Trade Commission (``the Commission'') has previously
certified that the Permerger Notification Rules and Report Form do not
significantly affect small businesses. The revision to the Form made by
this notice will not change the premerger notification rules in any way
that would affect that determination. Therefore, pursuant to 5 U.S.C.
605(b), as added by the Regulatory Flexibility Act, Public Law 96-354
(September 19, 1980), the Commission certifies that these rules will
not have a significant economic impact on a substantial number of small
entities. Section 604 of the Administrative Procedure Act, 5 U.S.C.
604, requiring a final regulatory flexibility analysis of this revision
is therefore inapplicable.
Background Information
The HSR Act requires all persons contemplating certain mergers or
acquisitions to file notification with the Commission and the Assistant
Attorney General of the Antitrust Division of the Department of Justice
(``the Assistant Attorney General'') and to wait a designated period of
time before consummating such proposed transactions. Congress empowered
the Commission, with the concurrence of the Assistant Attorney General,
to require ``that the notification * * * be in such form and contain
such documentary material and information * * * as is necessary and
appropriate'' to enable the agencies ``to determine whether such
acquisitions may, if consummated, violate the antitrust laws.'' (15
U.S.C. 18a(d)(1988)).
Pursuant to that section, the Commission, with the concurrence of
the Assistant Attorney General, developed the Antitrust Improvements
Act Notification and Report Form for Certain Mergers and Acquisitions.
The Form is designed to provide the Commission and the Assistant
Attorney General (collectively referred to as ``the enforcement
agencies'') with the information and documentary material necessary and
appropriate for an initial evaluation of the potential anticompetitive
effects of significant mergers, acquisitions and certain similar
transactions. The Form is not intended to elicit all potentially
relevant information relating to an acquisition. Completion of the Form
by all parties required to file ordinarily will permit both enforcement
agencies to determine whether the waiting period should be allowed to
expire or be terminated upon request, or whether a request for
additional information should be made under section 7A(e) of the Act
and 16 CFR 803.20.
All acquiring and acquired persons required by the HSR Act to file
notification must complete the Form, or a photostatic or other
equivalent reproduction, in accordance with the Rules, 16 CFR 801-803,
and the instructions attached to the Form.
Statement of Basis and Purpose for the Commission's Revision of the
Form and Removal of the Transitional Rule
Form Revision
To aid the enforcement agencies in determining the competitive
significance of a proposed transaction, the Form requires parties to
the transaction to provide information concerning their revenues for a
given base year and for the most recent year for which revenue
information is available. When the Form was first promulgated on July
31, 1978, 43 FR 33450, and became effective on September 5, 1978, it
required data for 1972 as the base year.
The Form was revised in 1980 to require data for 1977 as the base
year (45 FR 14205 (March 5, 1980)). In 1986, the Form was revised to
require data for 1982 as the base year (51 FR 10368 (March 26, 1986)).
Thereafter, a revision to the Form in 1990 changed the base year to
1987 (55 FR 31371 (August 2, 1990)). This notice changes the base year
from 1987 to 1992 and requires revisions to the Form relating to the
revenue information required by item 5 of the Form and the reference
materials to be used in completing item 5, as discussed more fully
below.
Item 5 of the Form is designed, in part, to elicit economic data
classified by Standard Industrial Classification (``SIC'') codes with
respect to business activities within the U.S. in which the reporting
person derived any dollar revenues in the base year and in the most
recent year for which data are available. (Rule 803.2 (b) and (c), 16
CFR 803.2 (b) and (c), provide for certain limitations on item 5 and
other data to be supplied by the reporting person). Such revenue data
are required by industry (4-digit SIC code), by product class (5-digit
SIC based code), and by product (7-digit SIC based code).
More specifically, item 5(a) currently requires that the reporting
person provide 1987 revenue data for each 4-digit industry in which
that filing person was engaged. Item 5(b)(i) currently requires that
the reporting person engaged in manufacturing provide 1987 revenue data
for each 7-digit product code from which it derived any revenues. Item
5(b)(ii) currently requires the reporting person to identify each
manufactured product that it has added or deleted since 1987. For those
products added, the reporting
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person must provide the total revenue attributable to the added product
for the most recent year. (The reporting person may identify the
product by a 7-digit product code or in the manner it ordinarily uses.)
Item 5(b)(iii) currently requires that the reporting person engaged in
manufacturing provided revenue data for the most recent year for each
5-digit product class from which it derived revenues. Item 5(c)
currently requires that the reporting person engaged in non-
manufacturing industries provide 4-digit revenue data for the most
recent year. (Pursuant to Rule 803.2(b), acquired persons are required
to limit their responses to item 5 to revenues derived from the assets
being acquired and/or the issuer(s) whose voting securities are being
acquired).
When originally promulgated, the Form required revenue data for two
time periods, i.e., for 1972 and for the most recent year for which the
requested information was available. The use of the 1972 ``base year''
was designed to coincide with the then most recent quinquennial
economic census and the Annual Survey of Manufacturers. These Bureau of
Census publications (as updated) serve as the most readily available
and reliable statistical sources of industry data and universe product
revenue data to which individual company product revenue data can be
compared. When the original Form was promulgated, the Commission and
the Assistant Attorney General stated their intention to revise Item 5
to require submission of 1977 revenue data as soon as the Bureau of the
Census published the 1977 Census of Manufacturers (43 FR 33526 (July
31, 1978)). Accordingly, the Commission amended the Form in 1980, in
1986 when the 1982 Census of Manufacturers was published, and again in
1990 when the 1987 Census of Manufacturers was published.
The Bureau of the Census is currently in the process of publishing
its Final Reports for the 1992 Census of Manufacturers, and it projects
that it will complete the publication of all Final Reports by September
1, 1995. Since most companies within the United States submit data to
the Bureau of the Census for economic censuses, many potential
reporting persons have gathered, compiled and assembled 1992 revenue
data in accordance with the SIC code format for the 1992 Census of
Manufacturers. In addition, the Bureau of the Census has completed its
Numerical List of Manufactured and Mineral Products, 1992 Census of
Manufacturers and Census of Mineral Industries (MC92-R-1) (``1992
Numerical List''). This publication contains 5-digit product class and
7-digit product codes for 1992 and is currently available from the
Government Printing Office. Its present availability and the imminent
availability of the 1992 product revenue universe data, contained in
the Bureau of the Census Reports, to the enforcement agencies, permit
the revision of item 5 to require 1992 data instead of 1987 data.
The previous change to the base year in 1990 was effective in 60
days from the date of publication of the Final Rule in the Federal
Register. A transitional period during which filers could submit either
1982 or 1987 data was not provided because of significant changes in
the 4-digit, 5-digit and 7-digit SIC codes. In contrast, the previous
changes to the base year in 1980 and 1986 were effective immediately
but provided for a 60-day transitional period during which filers were
permitted to submit either the old or the new revenue data.
Because there have not been significant changes in the SIC codes
from 1987 to 1992, the Commission has determined that the current
changes to the Form will be effective immediately, subject to a
transitional period until October 1, 1995, (as was permitted in the
changeovers to the 1977 and 1982 base years). During such time,
reporting persons may use as the base year either 1987 or 1992 when
providing revenue and SIC code data in response to items 5(a), 5(b)(i),
5(b)(ii), 5(b)(iii) and 5(c) of the Form. Thereafter, the Commission
and the Assistant Attorney General will accept only 1992 revenue and
SIC code data. Forms submitted on or after October 1, 1995, that do not
provide 1992 base year revenue data will be treated as deficient under
Sec. 803.10(c)(2) of the Rules. (16 CFR 803.10(c)(2)).
The Commission has decided to provide for a transitional period
during which base year revenue data may be submitted for either 1987 or
1992 and the corresponding 1987 or 1992 SIC codes can be used in
responding to item 5 in order to minimize the reporting burden on
filing persons. The transitional period allows for the submission of
new base year revenue data by first-time filers, who may otherwise be
required to compile old base year revenue data solely for the purpose
of completing the Form. It also permits reporting persons who routinely
file notifications with the enforcement agencies to use existing old
base year revenue data to complete the Form while finishing their
collection and organization of new base year revenue data. Although
this approach may temporarily complicate the substantive antitrust
reviews conducted by the enforcement agencies, the difficulties should
not be significant because there have not been substantial changes in
the SIC codes for 1992. Moreover, the enforcement agencies' antitrust
analysis clearly will benefit from the receipt of more up-to-date
information.
In 1990, when the Form was amended to require submission of 1987
base year revenue data, the Commission and the Assistant Attorney
General determined that reporting persons would be required to submit
revenue data using the codes published by the Bureau of Census rather
then the codes used by Census to collect the information. This
requirement is no longer necessary since the Bureau of the Census used
the same codes for data collection and for publication of the 1992
Census of Manufacturers. Accordingly, reporting persons will no longer
be required to convert revenue data from collected codes to the codes
published by the Bureau of Census when completing the Form.
The Commission believes that the notice and comment period
ordinarily required by the Administrative Procedure Act (``the APA''),
5 U.S.C. 553(b) is unnecessary here. Section 553(b)(B) exempts from the
APA's notice and comment requirements the promulgation of a rule where
the agency, for good cause, finds that the standard procedure would be
``impracticable, unnecessary, or contrary to the public interest.''
Promulgation of the proposed revision falls within this exemption for
several reasons.
First, the public was afforded the opportunity to comment on the
original Rules and Form in two notice and comment periods provided
pursuant to the rulemaking requirements of the APA. The rulemaking
culminated in the promulgation and publication of the Rules and the
Form, and was accompanied by a Statement of Basis and Purpose (43 FR
33450 (July 31, 1978)). Since the present amendment does not depart
from or alter the substance of the prior rulemakings (i.e., it does not
change the type or amount of information required by the Form), further
opportunity for comment is unnecessary. See generally, Texaco, Inc. v.
Federal Energy Administration, 531 F.2d 1071 (Emer. Ct. App.). cert.
denied, 426 U.S. 941 (1976); Durkin v. Edward S. Wagner Co., 115 F.
Supp. 118 (D.N.Y. 1953), aff'd 217 F.2d 303 (2d Cir.), cert. denied,
348 U.S. 964 (1954).
Second, the Commission and the Assistant Attorney General gave
notice of their intention to revise item 5 in the original promulgation
of the Rules and the Form in response to numerous
[[Page 40706]]
comments received during the two comment periods of the original
rulemaking. Several comments then opposed the requirement that 1972
data based on the SIC Codes be supplied on the grounds that the
compilation of the 1972 data would be unduly cumbersome, burdensome and
expensive. These positions were rejected by the Commission on the basis
that revenue information ``reported by SIC-based categories currently
provides the only feasible basis for the effective preliminary review
of reported acquisitions within the time limits imposed by the act.''
(43 FR at 33527, (July 31, 1978)).
Now, for the fourth time, the Commission is changing the
requirements of item 5 consistent with its earlier notices. The change
will lessen the compliance burden by requiring more recent revenue
data, which are generally more easily retrievable by and readily
available to reporting persons than 1987 data. The Commission finds
that a separate notice and comment period at this time would be
unnecessary and not in the public interest and, therefore, it is not
required by the APA.
Section 553(d) (5 U.S.C. 553(d)(3)) of the APA requires that 30
days notice be provided to the public before a rule becomes effective,
but provides an exception from this requirement where good cause is
found. (5 U.S.C. 553(d)(3)). Rather than delay the effective date of
the new requirements by 30 days, the Commission has determined in the
public interest to accommodate all reporting persons by making the rule
effective immediately but providing for a transitional period as
described above. The transitional period in effect provides more than
30 days notice to reporting persons before they must complete the Form
using 1992 base year revenue and SIC code data as required by this
rule.
The Commission, with the concurrence of the Assistant Attorney
General, hereby revises the Appendix to 16 CFR part 803.
The Transitional Rule
Section 7A of the Clayton Act became effective on February 27,
1977, 150 days after enactment. However, implementing rules could not
be promulgated prior to the effective date. Therefore, on January 27,
1977, the Commission, with the concurrence of the Assistant Attorney
General, promulgated a final rule designated the Transitional Rule (42
FR 6365 (February 2, 1977)). The Transitional Rule, 16 CFR part 800,
created an exemption for all transactions consummated prior to the
effective date of the Rules and specified the manner in which the Rules
would be implemented during the first 30 days following the effective
date. The Rules have now been in effect since September 5, 1978, and
there are no longer any transactions that are subject to the
Transitional Rule. Thus, the deletion of the Transitional Rule is
appropriate at this time.
The Commission believes that the notice and comment period
ordinarily required by the APA, 5 U.S.C. 553(b), is also unnecessary
for the removal of the Transitional Rule, which falls within the
exemption provided by Section 553(b)(B) of the APA. Because the
Transitional Rule governs no current or future transactions, no members
of the public will be affected by the deletion of the rule. Therefore,
to make the removal of the Transitional Rule subject to the notice and
comment requirements of the APA would be ``impractical, unnecessary, or
contrary to the public interest.'' (5 U.S.C. 553(b)(B)(1988)).
The Commission, with the concurrence of the Assistant Attorney
General, hereby removes 16 CFR part 800.
List of Subjects in 16 CFR Parts 800 and 803
Antitrust.
Final Rule
Accordingly, under the authority at 15 U.S.C. 45(a) and 46(g) the
Federal Trade Commission amends title 16 chapter I of the Code of
Federal Regulations as follows:
PART 800--TRANSITIONAL RULE
1. Part 800 is removed.
PART 803--TRANSMITTAL RULES
2. The authority citation for part 803 continues to read as
follows:
Authority: Section 7A(d), Clayton Act, 15 U.S.C. 18a(d) as added
by section 201, Hart-Scott-Rodino Antitrust Improvements Act of
1976, Pub. L. 94-435, 90 Stat. 1390.
3. The Appendix is amended by revising pages I and IV of the
Instructions to the Antitrust Improvements Act Notification and Report
Form for Certain Mergers and Acquisitions, and pages 6 and 7 of the
Antitrust Improvements Act Notification and Report Form for Certain
Mergers and Acquisitions to read as follows:
* * * * *
Appendix [Amended]
BILLING CODE 6750-01-M
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By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 95-19546 Filed 8-8-95; 8:45 am]
BILLING CODE 6750-01-C
