[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]



      

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Part IV





Federal Trade Commission





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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  

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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 

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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]

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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