[Federal Register Volume 88, Number 124 (Thursday, June 29, 2023)]
[Proposed Rules]
[Pages 42178-42218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13511]



[[Page 42177]]

Vol. 88

Thursday,

No. 124

June 29, 2023

Part III





 Federal Trade Commission





-----------------------------------------------------------------------





16 CFR Parts 801 and 803





Premerger Notification; Reporting and Waiting Period Requirements; 
Proposed Rule

  Federal Register / Vol. 88, No. 124 / Thursday, June 29, 2023 / 
Proposed Rules  

[[Page 42178]]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

16 CFR Parts 801 and 803

RIN 3084-AB46


Premerger Notification; Reporting and Waiting Period Requirements

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: Pursuant to Section 7A(d) of the Clayton Act, the Federal 
Trade Commission (``FTC'' or ``Commission'') is proposing amendments to 
the premerger notification rules (``the Rules'') that implement the 
Hart-Scott-Rodino Antitrust Improvements Act (``the Act'' or ``HSR'') 
and to the Premerger Notification and Report Form (the ``Form'') and 
Instructions (``Instructions''). These proposed changes would result in 
a redesign of the premerger notification process through both a 
reorganization of the information currently required and the addition 
of new information and document requirements. In addition, these 
changes would implement the Merger Filing Fee Modernization Act of 
2022. The proposed amendments would involve changes to both the Rules 
and the Instructions, and the Commission proposes explanatory and 
ministerial changes to the Rules as well as necessary amendments to the 
Instructions to effect the proposed changes.

DATES: Comments must be received on or before August 28, 2023.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Invitation to Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``16 CFR Parts 801-803--
Hart-Scott-Rodino Coverage, Exemption, and Transmittal Rules, Project 
No. P239300'' on your comment. File your comment online at https://www.regulations.gov/ by following the instructions on the web-based 
form. If you prefer to file your comment on paper, mail your comment to 
the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610, (Annex H), 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Robert Jones, Assistant Director, 
Premerger Notification Office, Bureau of Competition, Federal Trade 
Commission, 400 7th Street SW, Room CC-5301, Washington, DC 20024, or 
by telephone at (202) 326-3100.

SUPPLEMENTARY INFORMATION:

Overview

    The Act and Rules currently require the parties to certain mergers 
and acquisitions to submit premerger notification filings (``HSR 
Filings'') to the Commission and to the Assistant Attorney General in 
charge of the Antitrust Division of the Department of Justice (``the 
Assistant Attorney General'') (collectively, ``the Agencies''), and to 
wait a short period of time before consummating such transactions. The 
reporting and waiting period requirements are intended to enable the 
Agencies to determine whether a proposed merger or acquisition may 
violate the antitrust laws, including Section 7 of the Clayton Act, 15 
U.S.C. 18, if consummated and, when appropriate, to seek an injunction 
in federal court in order to enjoin anticompetitive acquisitions prior 
to consummation.
    Section 7A(d)(1) of the Clayton Act, 15 U.S.C. 18a(d)(1), directs 
the Commission, with the concurrence of the Assistant Attorney General, 
in accordance with the Administrative Procedure Act, 5 U.S.C. 553, to 
require that premerger notification be in such form and contain such 
information and documentary material as may be necessary and 
appropriate to determine whether the proposed transaction may, if 
consummated, violate the antitrust laws. In addition, Section 7A(d)(2) 
of the Clayton Act, 15 U.S.C. 18a(d)(2), grants the Commission, with 
the concurrence of the Assistant Attorney General, in accordance with 5 
U.S.C. 553, the authority to define the terms used in the Act, exempt 
classes of transactions that are not likely to violate the antitrust 
laws, and prescribe such other rules as may be necessary and 
appropriate to carry out the purposes of Section 7A.
    In this notice of proposed rulemaking (``NPRM''), the Commission 
proposes amending the Rules (Part 801 and Part 803 and its appendices), 
the Form, and the Instructions to reorganize the information currently 
required with an HSR Filing and to require additional information 
critical to the Agencies' initial review. These changes would improve 
the efficiency and effectiveness of that initial review by providing 
the information the Agencies need to identify during the initial 30-day 
waiting period any transaction that may pose competition concerns and 
potentially narrow the scope of any investigation or reduce the need to 
conduct a more in-depth investigation of the proposed transaction. 
These amendments also incorporate the changes to implement the 
collection of information mandated by the Merger Filing Fee 
Modernization Act of 2022 (``2022 Amendments'') contained within the 
Consolidated Appropriations Act, 2023 (Pub. L. 117-328, 136 Stat. 4459) 
to Section 7(a) of the Clayton Act, 15 U.S.C. 18a. Finally, the 
Commission proposes explanatory and ministerial changes to the Rules as 
well as necessary amendments to the Instructions to effect the proposed 
changes.

Background

    The premerger notification program is designed to provide the 
Commission and the Assistant Attorney General with the information and 
documentary material necessary and appropriate for an initial 
evaluation of the potential anticompetitive impact of transactions. The 
HSR premerger notification program is an essential tool for effective 
and efficient merger enforcement because it enables the Agencies to 
investigate acquisitions that may substantially lessen competition or 
tend to create a monopoly in violation of Section 7 of the Clayton Act 
and to challenge them before they are consummated and the businesses of 
the two companies are ``scrambled'' or integrated such that effective 
post-merger relief is much more difficult. Congress intended that 
premerger review would ``strengthen the enforcement of Section 7 by 
giving the government antitrust agencies a fair and reasonable 
opportunity to detect and investigate large mergers of questionable 
legality before they are consummated.'' \1\ Premerger notification and 
review, including a mandatory waiting period during which they cannot 
consummate the transaction, gives the Agencies the procedural tools 
necessary to seek to prevent mergers in court before they cause harm or 
the operations of the firms become so integrated that the premerger 
state of competition cannot be restored.
---------------------------------------------------------------------------

    \1\ H.R. Rep. No. 94-1373 at 5 (1976).
---------------------------------------------------------------------------

    The HSR Act and Rules specify that transactions subject to the HSR 
Act cannot be consummated until 30 days for most transactions (cash 
tender offers and certain types of bankruptcies observe a 15-day 
waiting period) \2\ after the parties submit an HSR Filing to the 
Agencies. These statutory deadlines for conducting an initial review 
are extraordinarily short, and the Agencies must work quickly to 
determine whether to take steps to prevent the consummation of 
potentially anticompetitive transactions. During the initial waiting 
period, the FTC's

[[Page 42179]]

Premerger Notification Office (``PNO'') staff must review each HSR 
Filing to ensure it complies with the HSR Rules. Staff at both Agencies 
initially review the information and documents for substantive 
antitrust concerns, identify and assess the relevant facts, conduct a 
preliminary antitrust analysis, form preliminary recommendations 
regarding the investigation's direction, and communicate those 
recommendations within each Agency. As staff formulate recommendations, 
they must also initiate clearance from the other agency for those 
transactions that merit collection of additional information to avoid 
any duplication of effort and ensure that only one agency investigates 
the transaction. Senior leadership at the investigating agency must 
review staff's recommendations and determine whether to issue a Request 
for Additional Information (``Second Request''),\3\ which starts the 
second phase of the agency's merger investigation. If there are other 
jurisdictions investigating, Agency staff coordinate with relevant 
state Attorneys General or international counterparts. All of this must 
happen during the initial waiting period, which is typically 30 days.
---------------------------------------------------------------------------

    \2\ 15 U.S.C. 18a(b)(1)(B); 11 U.S.C. 363(b)(2).
    \3\ 15 U.S.C. 18a(e).
---------------------------------------------------------------------------

    Given the large number of HSR Filings submitted each year, the 
Agencies must use their resources efficiently and effectively to focus 
primarily on transactions that may harm competition. Information 
submitted as part of the HSR premerger notification process is a key 
starting point, and the information contained in the HSR Filing should 
be sufficient to allow the Agencies to conduct a thorough but quick 
evaluation of whether the proposed transaction is one that requires 
more in-depth investigation through the issuance of Second Requests.
    However, after a comprehensive review of the premerger notification 
process and based on the Agencies' experience conducting in-depth 
investigations of challenged mergers, the Commission believes that the 
information currently reported in an HSR Filing is insufficient. In 
fact, the challenges of premerger review have expanded considerably 
over time as result of several factors. First, there has been 
tremendous growth in sectors of the economy that rely on technology and 
digital platforms to conduct business and, given the dynamic nature of 
these markets and the importance of acquisition strategies to success 
and market growth, mergers and acquisitions in these sectors present a 
unique challenge for the Agencies.\4\ In these sectors, some 
transactions involve firms whose premerger relationship is not clearly 
horizontal or vertical; rather, merger activity in these sectors 
increasingly involves firms in related business lines where the 
Agencies must closely examine the potential for direct competition in 
the future.
---------------------------------------------------------------------------

    \4\ See, e.g., Fed. Trade Comm'n, Non-HSR Reported Acquisitions 
by Select Technology Platforms 23-24 (2021).
---------------------------------------------------------------------------

    In addition, the very nature of HSR-reportable transactions has 
become more complex over time. Transaction structures have evolved to 
include not only the Ultimate Parent Entity (UPE) and its acquiring 
entity,\5\ but also other entities within the acquiring person. For 
instance, there can be numerous entities between the UPE and acquiring 
entity, and other investors can have a stake in any one of these 
entities. As a result, these investors could have a direct role in 
effectuating the transaction. Individuals or entities other than the 
those directly involved in the transaction may be able to exert 
influence over the transaction as well. The existence of subsidies or 
loans, among other means, may subject the buyer to additional pressures 
from individuals or entities not directly a party to the reportable 
transaction. Indeed, the use of board observers has become a more 
frequent way for outside players to gain direct access to company 
strategy. Each of these factors can affect a transaction's impact on 
the competitive landscape.
---------------------------------------------------------------------------

    \5\ 16 CFR 801.1(a).
---------------------------------------------------------------------------

    Consistent with this concern, the Commission's NPRM also proposes 
changes to implement the collection of information about certain 
subsidies, as mandated by the 2022 Amendments. Congress determined that 
foreign subsidies can distort the competitive process or otherwise 
change the incentives of the firm in ways that undermine competition 
following an acquisition and are particularly problematic when provided 
by entities or countries that are strategic or economic threats to the 
United States.\6\ The proposed changes require filing parties to 
provide information about subsidies received from foreign entities of 
concern, as discussed in more detail below.
---------------------------------------------------------------------------

    \6\ Title II of the Merger Filing Fee Modernization Act of 2022, 
Public Law 117-329, Div. GG, sec. 201(a)(1) at 3826, 136 Stat. 4459. 
Congress pointed to remarks of former Commissioner Noah Phillips 
that ``one area where antitrust needs to reckon with the strategic 
interests of other nations is when we scrutinize mergers or conduct 
involving state-owned entities . . . companies that are controlled, 
by varying degrees, by the state . . . [and] often are a government 
tool for implementing industrial policies or to protect national 
security.'' Id. at sec. 201(a)(5).
---------------------------------------------------------------------------

    Another factor that has an impact on the complexity of premerger 
review is that consistent with the law and binding judicial precedent, 
the Agencies have stepped up efforts to review transactions for all 
their potential competitive impacts. The Agencies are responding to 
evidence that the U.S. economy is becoming increasingly concentrated 
overall.\7\ This concentration may reflect decreased competition, which 
can result in higher prices for consumers, decreased innovation, 
reduction in output, and lower wages for workers. For example, 
economists have estimated that workers' share of national income has 
fallen sharply since 2000, such that the workers' share of income today 
is now 6 to 8 percentage points below the 1980 level.\8\ These findings 
reveal that despite the Agencies' efforts to prevent market 
consolidation through merger enforcement, many markets suffer from a 
lack of robust competition and mergers continue to cause harm.\9\ As 
President Biden noted in his Executive Order on Promoting Competition, 
industry consolidation and weakened competition ``deny Americans the 
benefits of an open economy,'' with ``workers, farmers, small 
businesses, and consumers paying the price.'' \10\
---------------------------------------------------------------------------

    \7\ See, e.g., Council of Econ. Advisers Issue Brief, Benefits 
of Competition and Indicators of Market Power at 4 (Apr. 2016), 
https://obamawhitehouse.archives.gov/sites/default/files/page/files/20160414_cea_competition_issue_brief.pdf (noting change in revenue 
share earned by the 50 largest firms in each sector); David Autor et 
al., The Fall of the Labor Share and the Rise of Superstar Firms, 
135 Q.J. Econ. 645 (2020) (finding that the top 4 firms in the top 
sectors of the economy became steadily and significantly more 
concentrated); Thomas Philippon, Causes, Consequences, and Policy 
Responses to Market Concentration, in Aspen Economic Strategy Group, 
Maintaining the Strength of American Capitalism (2019) (reviewing 
literature on concentration in the U.S. economy).
    \8\ See, e.g., Gene M. Grossman and Ezra Oberfield, The Elusive 
Explanation for the Declining Labor Share, 14:1 Ann. Rev. Econ. 93-
124 (2022).
    \9\ See, e.g., Keith Brand, Chris Garmon, Ted Rosenbaum, In the 
Shadow of Antitrust Enforcement: Price Effects of Hospital Mergers 
from 2009-2016, (forthcoming in J.L. Econ.); Zack Cooper et al., The 
Price Ain't Right? Hospital Prices and Health Spending on the 
Privately Insured, 134 Q.J. Econ. 51 (2019); Gautam Gowrisankaran, 
Aviv Nevo, and Robert Town, Mergers When Prices are Negotiated: 
Evidence from the Hospital Industry, 105 Am. Econ. Rev. 172 (2015); 
Orley Ashenfelter, Daniel Hosken, and Matthew C. Weinberg, Did 
Robert Bork Understate the Competitive Impact of Mergers? Evidence 
from Consummated Mergers, 57 J.L. & Econ. S67 (2014).
    \10\ Exec. Order No. 14,036, 86 FR 36,987 (July 14, 2021). See 
also The White House, Fact Sheet: Executive Order on Promoting 
Competition in the American Economy (July 9, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-onpromoting-competition-in-the-american-economy/ (noting that ``Economists find that as competition 
declines, productivity growth slows, business investment and 
innovation decline, and income, wealth, and racial inequality 
widen.'').

---------------------------------------------------------------------------

[[Page 42180]]

    Each year, many of the transactions that are investigated by the 
Agencies are also investigated by another jurisdiction under their laws 
and procedures and this adds to the complexity of premerger review. 
Moreover, the Agencies' experience gained while cooperating with 
international competition agencies that are conducting their own merger 
investigation reveals that better information can help address the 
increased complexity of premerger review and improve its efficiency. As 
compared to the Form, most international jurisdictions have merger 
filing forms that ask filers to provide significantly more information 
that their staff considers relevant to the competition analysis, 
including details about the transaction's structure and rationale, 
horizontal overlaps, vertical and other relationships, and more 
detailed sales data. Importantly, many other jurisdictions rely on 
narrative responses from the parties that contain basic information 
about business lines or company operations, and several require the 
parties to self-report overlaps.
    For all these reasons, the Commission believes that the information 
currently collected by the Form is insufficient for the Agencies to 
conduct an effective and efficient initial evaluation of a 
transaction's likely competitive impact on all of those who might be 
affected, including consumers, small businesses, and workers. In the 
Agencies' experience, the current Form does not provide their staff 
with complete information, including information about the transaction; 
the filers' business operations and those of any related entities; the 
premerger relationship between the acquiring person and the acquired 
entity; individuals or entities that may have influence over the 
operation of the relevant business lines; the full range of potential 
competitive implications of the transaction, including effects on 
workers; and prior acquisitions.
    To supplement the shortcomings of HSR Filings, Agency staff must 
often rely on voluntary cooperation from third parties--customers and 
competitors of the merging parties--during the initial waiting period 
to learn basic information about the parties' business dealings and the 
markets in which they compete. In addition, staff needs to conduct 
independent research using publicly available information to supplement 
the modest amount of material submitted with the HSR Filing. Neither of 
these is reliable as a substitute for information provided by the 
parties themselves and certified as a complete response. Moreover, the 
additional effort required to discover basic business information about 
the parties to the transaction and their premerger relationship is 
inefficient and can result in both too few in-depth investigations when 
the information collected does not uncover a significant premerger 
competitive relationship as well as in-depth investigations that are 
either too broad or too narrow due to the insufficient detail about 
those relationships that is currently provided in HSR Filings. The 
information collected by the parties for their own premerger assessment 
of the transaction is paramount for the Agencies' antitrust assessment 
and should be collected and submitted with the initial filing.\11\ The 
Commission therefore proposes additional questions and document 
requests to provide the Agencies with the information necessary to 
facilitate their initial review, as discussed further in this NPRM.
---------------------------------------------------------------------------

    \11\ ``The House conferees contemplate that, in most cases, the 
Government will be requesting the very data that is already 
available to the merging parties, and has already been assembled and 
analyzed by them. If the merging parties are prepared to rely on it, 
all of it should be available to the Government.'' 122 Cong. Rec. 
H30877 (Sept. 16, 1976) (remarks of Rep. Rodino).
---------------------------------------------------------------------------

    At the same time, it has become clear to the Commission that 
certain required information currently submitted in the Form to aid the 
Agencies' review is not as helpful as originally intended. For 
instance, as a general screening tool, reporting revenue by specific 
dollar amounts for specific industry codes, as defined by the North 
America Industry Classification System (``NAICS''), does not materially 
assist the Agencies in their initial review. Reporting revenue ranges 
for the NAICS codes, would sufficiently convey which lines of business 
of the filing person generate the most revenue. In addition, the 
requirement to report manufacturing revenues at a granular level has 
become less helpful to the Agencies during their initial review as a 
result of changes made by the United States Census Bureau (``Census'') 
to one of its revenue classification systems. Finally, the Commission 
believes that the identification of minority investors in target 
entities, other than those that will ``roll over'' their investments 
post-consummation, is of limited use. The Commission therefore proposes 
deleting these requirements, as discussed in further detail below.
    The Commission anticipates that the proposed reorganization and 
collection of additional information in HSR Filings would greatly 
enhance the Agencies' ability to complete the review of a reportable 
transaction in a short period of time, and that they are necessary and 
appropriate in order for the Agencies to vigorously enforce the 
nation's antitrust laws. The changes would improve the efficiency and 
effectiveness of the Agencies' initial review process and reduce the 
need to rely on the voluntary submission of additional information by 
the parties and third-party industry sources during the initial waiting 
period.
    Finally, the Commission notes that since the implementation of the 
Act and Rules in the late 1970s, there has never been a large-scale 
reorganization of the information required in an HSR Filing. As a 
result, the Commission is proposing a comprehensive redesign of the 
premerger notification process through both a reorganization of the 
information currently required and the addition of new information 
requirements. As the Agencies are currently working to complete an 
electronic filing (``e-filing'') platform, the exact structure of the 
redesign is unclear at this time. The Commission believes that the 
development and roll-out of an e-filing platform will mark a 
significant improvement in the submission and processing of HSR 
Filings, with benefits for both filers and the Agencies. Thus, in this 
NPRM, the Commission is providing an overview of the proposed 
reorganization of the information currently required and the proposed 
new information requirements. The exact form of the redesign and how 
filers will submit this information will be more clearly laid out in 
any Final Rule after the Commission reviews all comments to this NPRM.

Proposed Changes to the Rules

I. Proposed Changes to Part 801

A. Section 801.1: Proposed Definitions of ``Foreign Entity or 
Government of Concern'' and ``Subsidy''

    On December 29, 2022, the President signed into law the 
Consolidated Appropriations Act, 2023, which included amendments to the 
HSR Act in t2022 Amendments. Public Law 117-328, 136 Stat. 4459. 
Congress found that foreign subsidies, particularly those from 
``countries or entities that constitute a strategic or economic threat

[[Page 42181]]

to United States interests,'' \12\ ``can distort the competitive 
process by enabling the subsidized firm to submit a bid higher than 
other firms in the market, or otherwise change the incentives of the 
firm in ways that undermine competition'' \13\ post-merger. The 2022 
Amendments require the Commission, with concurrence of the Assistant 
Attorney General, and in consultation with Chairperson of the Committee 
on Foreign Investment in the United States, the Secretary of Commerce, 
the Chair of the United States International Trade Commission, the 
United States Trade Representative, and heads of other appropriate 
agencies (``Relevant Agencies''), to promulgate a rule to require 
persons making an HSR Filing to disclose subsidies received from 
countries or entities that are strategic or economic threats to the 
United States. Congress identified those threats as ``foreign entities 
of concern'' as defined in section 40207 of the Infrastructure and Jobs 
Act, 42 U.S.C. 18741(a), and required the Commission to collect 
information about subsidies from these entities as part of HSR Filings.
---------------------------------------------------------------------------

    \12\ Title II of the Merger Filing Fee Modernization Act of 
2022, Public Law 117-329, Div. GG, sec. 201(a)(2) at 3826, 136 Stat. 
4459.
    \13\ Id. at sec. 201(a)(1).
---------------------------------------------------------------------------

    After conducting its own internal diligence to draft a rule and in 
consultation with the Relevant Agencies on this topic, the Commission 
proposes amending Sec.  801.1 to add proposed paragraphs (r)(1) and 
(2), which define ``foreign entity or government of concern'' and 
``subsidy,'' respectively.
1. Section 801.1(r)(1) Foreign Entity or Government of Concern
    In the 2022 Amendments, Congress found that foreign subsidies are 
particularly problematic when granted by countries or entities that 
constitute a strategic or economic threat to U.S. interests. To 
identify such subsidies, the Commission proposes new rule Sec.  
801.1(r)(1). This proposed rule defines, in proposed subsection (i), 
subsidies that would have to be disclosed, per Congress' mandate, if 
received from a ``foreign entity of concern'' as the term is defined in 
section 40207 of the Infrastructure Investment and Jobs Act (``IIJ 
Act''), 42 U.S.C. 18741(a). The Commission therefore proposes adopting 
this definition in Sec.  801.1(r)(1)(i).
    The Commission recognizes, however, that the definition of a 
``foreign entity of concern'' in the IIJ Act does not explicitly 
include foreign governments or government agencies. To the extent that 
HSR filers have received any subsidy directly from the government of a 
country designated by 42 U.S.C. 18741(a)(5)(C), the Commission believes 
that including these subsidies would be consistent with Congress' 
mandate to capture information regarding subsidies when granted by 
entities posing a strategic and economic threat to the United States. 
Indeed, the Agencies' understanding of the subsidies' competitive 
significance would be incomplete without including subsidies granted by 
foreign governments or government agencies of foreign countries that 
are covered nations under 42 U.S.C. 18741(a)(5)(C). Therefore, the 
Commission proposes requiring persons making an HSR Filing to report 
subsidies received from governments (and their agencies) of foreign 
countries that are covered nations under 42 U.S.C. 18741(a)(5)(C) in 
proposed Sec.  801.1(r)(1)(ii).
    Finally, the Commission proposes that proposed Sec. Sec.  
801.1(r)(1)(i) and (ii) retain the references to the respective 
sections of the IIJ Act rather than incorporating the current text of 
these sections to assure that the proposed rule remains consistent with 
any subsequent amendments to these sections within the IIJ Act.
2. Section 801.1(r)(2) Subsidy
    The 2022 Amendments found that ``[f]oreign subsidies, which can 
take the form of direct subsidies, grants, loans (including below-
market loans), loan guarantees, tax concessions, preferential 
government procurement policies, or government ownership or control, 
can distort the competitive process.'' \14\ Thus, the 2022 Amendments 
require the Commission to collect information about such subsidies to 
enable the Agencies to determine whether the transaction, if 
consummated, would violate the antitrust laws. But the statute does not 
define the term ``subsidy'' and its specific definition has, in fact, 
been heavily debated and negotiated in both U.S. legislation and 
international treaties in other contexts. The Commission is mindful of 
the relevant caselaw and expertise of other U.S. agencies that have 
developed over decades and, after consultation with the Relevant 
Agencies on this topic, the Commission proposes the adoption of the 
definition of subsidies in Title VII of the Tariff Act of 1930 
(``Tariff Act''), 19 U.S.C. 1677(5)(B).
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

    The Tariff Act definition of ``subsidy'' is consistent with the 
definition in the World Trade Organization's Agreement on Subsidies and 
Countervailing Measures (``SCM''), to which the United States is a 
party.\15\ The Commission believes that because this definition is 
found both in U.S. law and in the SCM, both U.S. and foreign filing 
parties, or the law firms that represent them, should be familiar with 
and able to apply. The Commission also believes this definition is 
consistent with the Congressional mandate in the 2022 Amendments.
---------------------------------------------------------------------------

    \15\ 19 U.S.C. 3511(d)(12).
---------------------------------------------------------------------------

    The Commission thus proposes adopting this definition in Sec.  
801.1(r)(2) and that the proposed rule retain the reference to the 
Tariff Act definition rather than incorporating the current text of 
that section to assure that the proposed rule remains consistent with 
any subsequent amendments to the Tariff Act.
    The incorporation of this proposed change into the Instructions is 
discussed below at III.E.1.

II. Proposed Changes to Part 803

A. Sections 803.2, 803.5, and 803.10: Adoption of Electronic Filing

    The Commission proposes amending Sec. Sec.  803.2(e) and (f); 
803.5(a)(1), (3), and (b); and 803.10(c)(1)(i) and (ii) to eliminate 
references to paper and DVD filings to physical offices. In March 2020, 
the COVID-19 pandemic and resulting closures of federal office 
buildings prevented the Commission and Assistant Attorney General from 
physically accepting HSR Filings, as had been the practice since the 
original adoption of the Rules in 1978. As a result, on March 17, 2020, 
the Agencies began accepting filings electronically.\16\ Given the 
success of that system, the Commission proposes amending the Rules as 
noted above to adopt electronic filing and eliminate references to 
paper and DVD filings. This change benefits both the Agencies and 
filing parties by reducing reliance on the delivery and acceptance of 
paper filings or DVDs.
---------------------------------------------------------------------------

    \16\ Press Release, Fed. Trade Comm'n, Premerger Notification 
Office Implements Temporary e-Filing System (March 13, 2020), 
https://www.ftc.gov/news-events/news/press-releases/2020/03/premerger-notification-office-implements-temporary-e-filing-system.
---------------------------------------------------------------------------

B. Section 803.2: Requiring Separate Forms for Acquiring and Acquired 
Persons

    The Commission proposes amending Sec.  803.2(a) and deleting Sec.  
803.2(b)(1)(v) so that filing persons that are both the acquiring and 
acquired person are required to make separate filings. Currently, the 
Rules, Instructions, and Form permit filers that are both an acquiring 
and an acquired person in a transaction to file only one Form. This

[[Page 42182]]

scenario arises most commonly when a seller will receive voting 
securities of the buyer as consideration for the sale of the target. In 
such transactions, both the acquisition of the target by the buyer and 
the acquisition of the buyer's voting securities by the seller may be 
reportable. Thus, the buyer and seller can each be an acquiring and an 
acquired person.
    Although the Rules permit filers to use one Form for the two 
transactions in these cases, Sec.  803.2(b)(1)(v) requires that 
separate responses be provided for Items 5 through 8, one set of 
responses as the acquiring person and one set as the acquired person. 
In the Commission's experience, filers that opt to combine the 
information on a single Form often do not include everything that is 
required, and these filings are, in fact, very confusing for the 
Agencies to review. In contrast, when filers choose to submit two 
separate Forms for such transactions, these filings provide all the 
required information and in a much clearer format. The Commission thus 
proposes amending Sec.  803.2(a) and deleting Sec.  803.2(b)(1)(v) to 
require acquiring persons and acquired persons to submit separate HSR 
Filings, one as the acquiring person and one as an acquired person, in 
instances where filers qualify as both. This proposed approach would 
make the Agencies' initial review much easier by more clearly 
separating information related to the acquiring person from the 
acquired person. No new information would be required, and technology 
allows parties to save copies of filings to reduce the need to input 
repetitive information.

C. Section 803.5(b): Requiring Draft Agreements or Term Sheets

    The Commission proposes amending Sec.  803.5(b) to require filers 
who have not executed a definitive transaction agreement before making 
an HSR Filing to submit a draft agreement or term sheet that describes 
with sufficient detail the scope of the entire transaction that will be 
consummated after observing the waiting period required by the Act. 
Section 803.5(b) currently allows filers in any non-Sec.  801.30 
acquisition to file on the basis of ``a contract, agreement in 
principle or letter of intent to merge or acquire [that] has been 
executed'' and an affidavit attesting to that execution as well as the 
good faith intention to complete the transaction. In permitting parties 
to file before the signing of a definitive agreement, the Commission 
has relied on the assumption that the filings would ``contain 
sufficiently definitive information about the transaction to permit 
accurate analysis.'' \17\ In the Commission's experience, however, 
filings submitted on the basis of bare preliminary agreements, such as 
an indication of interest, non-binding letter of intent, or agreement 
in principle (``Preliminary Agreements''), typically do not meet this 
standard.
---------------------------------------------------------------------------

    \17\ 43 FR 33450, 33511 (July 31, 1978).
---------------------------------------------------------------------------

    Often, Preliminary Agreements reflect only very early discussions 
between the parties, and since there is currently no obligation to file 
a draft or final agreement once the HSR Filing is submitted, the 
Agencies must spend time during the initial waiting period simply 
trying to discover the scope and timing of the transaction. Moreover, 
given the preliminary nature of such a filing, the parties have often 
not yet undertaken a robust analysis of the transaction and therefore 
have drafted few, if any, documents responsive to Items 4(c) or 4(d) of 
the current Form. Permitting parties to submit an HSR Filing prior to a 
complete substantive analysis of the transaction, and at times even 
before the parties have done diligence on rationales or justifications 
for the transaction, puts the Agencies at a distinct disadvantage 
during the initial waiting period in determining what the transaction 
is and whether it may violate the antitrust laws if consummated.
    Additionally, HSR Filings made during the early phases of 
negotiations may be too uncertain to merit review. The original 
Statement of Basis and Purpose from 1978 (``1978 SBP'') provides clear 
guidance that ``[b]ecause of the time and resource constraints upon the 
agency staffs,'' the Agencies should not expend resources to review 
transactions so lacking in specifics that they could be considered 
merely ``hypothetical.'' \18\ Yet allowing for the submission of a 
filing on the basis of a Preliminary Agreement often triggers the use 
of limited resources for hypothetical transactions, first to discover 
the full range of potential viable transactions, and then to assess the 
competitive impact of those potential iterations.
---------------------------------------------------------------------------

    \18\ Id. at 33510-511.
---------------------------------------------------------------------------

    The Commission therefore proposes amending Sec.  803.5(b) to 
eliminate the ability to submit an HSR Filing on any Preliminary 
Agreement without providing a term sheet or draft agreement that 
reflects sufficient detail about the proposed transaction to allow the 
Agencies to understand the scope of the transaction and to confirm that 
the transaction is more than hypothetical. The Commission also proposes 
a corresponding change to the Instructions, as noted at III.C.6. 
Because detailed term sheets or draft agreements are often prepared in 
the ordinary course of deal negotiations, the Commission does not 
expect this change would impose a significant burden on filing parties. 
However, the Commission recognizes that eliminating the parties' 
ability to make filings prior to the negotiation of such documents may 
change the timing of filing and would likely result in more robust 
filings that would take additional time to prepare. On balance, the 
Commission believes that this proposed change is consistent with the 
original intent of the Rules to prevent expending scarce Agency 
resources on hypothetical transactions and would allow the Agencies to 
focus on transactions definitive enough to permit accurate analysis.

D. Section 803.8: Translation of Documents

    The Commission proposes amending Sec.  803.8 to require submission 
of English-language translations for all foreign-language documents 
submitted with the initial HSR Filing. Section 803.8(a) currently 
provides that parties need not translate foreign-language materials 
submitted with the initial filing, and that English-language outlines, 
summaries, extracts, or verbatim translations need only be provided if 
they already exist. Section 803.8(b), in contrast, has required since 
1983 that all foreign-language documents responsive to a Second Request 
be provided with English translations.\19\
---------------------------------------------------------------------------

    \19\ The Commission proposed mandatory translation in 1981, 46 
FR 38710 (July 29, 1981), and issued a final rule in 1983, 48 FR 
34427 (July 29, 1983).
---------------------------------------------------------------------------

    In the Commission's experience since the early 1980s when Rule 
803.8 was first adopted, it is no longer enough to require translations 
of only those foreign-language documents submitted in response to 
Second Requests because today's HSR Filings quite frequently contain 
foreign-language materials. These materials typically include key 
documents, such as the transaction agreements submitted in response to 
current Item 3(b) of the Form, the relevant financials submitted in 
response to current Item 4(b), and the documents submitted in response 
to current Items 4(c) and 4(d) of the Form. Parties often submit 
foreign-language materials in their HSR Filings with no translation at 
all or with only rough English-language outlines, summaries, or 
extracts, which may not accurately and fully convey the contents of the 
foreign-language document. As a result, the Agencies must either obtain 
their

[[Page 42183]]

own translations of these documents or miss out on potentially critical 
information, leaving the Agencies at a disadvantage during their 
initial review. Given the wide variety of foreign languages the 
Agencies typically see, it would be very costly for the Agencies to 
retain translation services for each filing that may contain some 
foreign-language material. Further, obtaining translations adds 
significant delay within the already time-constrained initial waiting 
period and would not allow for filing parties to review the 
translations for errors. These translations may be especially important 
for those transactions that report foreign subsidies.
    To address this issue, the Commission proposes combining Sec. Sec.  
803.8(a) and 803.8(b). Proposed Sec.  803.8 would therefore be one 
paragraph requiring that verbatim English translations be provided with 
all foreign-language materials submitted as part of an HSR Filing or in 
response to a Second Request. For either an initial HSR Filing or in 
response to a Second Request, both the original document and the 
English translation would need to be submitted. Proposed Sec.  803.8 
would not require any particular method of translation but would 
specify that, whatever translation method the parties choose, all 
verbatim translations must be understandable, accurate, and complete. 
This proposed change would also be reflected in the Instructions, as 
specified below in III.A.4.
    Although the Commission noted in its 1983 final rulemaking that 
requiring translations created a burden for filing parties,\20\ the 
Commission now believes that translation tools available to the parties 
have become more abundant and that these tools provide many options for 
translation that should significantly reduce the burden of providing 
translations. Translations of foreign-language documents would greatly 
benefit the Agencies in allowing staff to know the content of 
responsive documents submitted in a foreign language. The Commission 
invites comment on whether there are categories of documents identified 
in this NPRM that would present a significant burden to translate and 
what other alternatives might achieve the Commission's goal of being 
able to understand and assess foreign-language documents while creating 
less burden for filing parties.
---------------------------------------------------------------------------

    \20\ 48 FR 34427, 34440 (July 29, 1983).
---------------------------------------------------------------------------

E. Section 803.10: Commencement of Waiting Periods

    The Commission proposes amending Sec.  803.10(c)(1)(i) to clarify 
when filings made electronically are to be credited as received by the 
Agencies. Specifically, the Commission proposes amending this rule to 
clarify that compliant filings will be credited as received on the date 
filed if: (i) the electronic submission is complete by 5:00 p.m. 
Eastern Time; and (ii) such date is not a Saturday, Sunday, legal 
public holiday (as defined in 5 U.S.C. 6103(a)), or the observed date 
of such legal public holidays.
    These clarifications are consistent with current and historical 
practices. Of course, historically, the Rules did not need to specify 
this information, since the receipt of physical filings (either on 
paper or DVD) required the offices of the Assistant Attorney General 
and Commission to be open. But because electronic filing platforms can 
allow submission of filings even when Agency staff is not available to 
receive the filings, the proposed amendments make clear that filings 
are only credited as received during regular business hours on regular 
business days. These proposed changes would provide clarity and thus 
benefit both filing parties and the Agencies.

F. Section 803.12: Information To Be Updated With Refiling

    The Commission proposes amending Sec.  803.12(c) to specify which 
responses to the items in the proposed Instructions would need to be 
updated if the acquiring person chooses to withdraw its HSR Filing and 
refile it (an ``Updated HSR Filing''). The procedure for voluntary 
withdrawal and refiling permits the acquiring person to restart the 
initial waiting period, so long as no material changes have been made 
to the transaction, to provide the Agencies an additional 15 or 30 days 
(depending on the transaction type) to review the transaction without 
issuing a Second Request. If the Updated HSR Filing is received within 
two business days of withdrawal, no new fee is required, but filers 
currently must provide a new affidavit and certification and update 
current Item 4 of the Form to provide the Agencies with more recent 
information that is likely relevant to the continued review.
    The Commission proposes eliminating the requirement to provide 
updated financials, currently required by Item 4(a) and (b), in the 
Updated HSR Filing. The Commission's experience has shown that, given 
that the withdraw and refile procedure is completed within 
approximately one month of the original filing, the financial documents 
required by Item 4(a) and (b) are rarely changed and therefore updating 
them is not essential in this phase of its investigation.
    The Commission proposes requiring updated Transaction-Related 
Documents with the Updated HSR Filing, which, as discussed below in 
III.D.1.a., would comprise the current Item 4(c) and (d) documents 
subject to proposed modifications of the custodians and clarifications. 
Documents responsive to current Item 4(c) and (d) typically reflect the 
most relevant thinking of key individuals with knowledge of the 
transaction within the acquiring person and are required as part of an 
Updated HSR Filing. Therefore, the Commission believes these documents 
are essential to the Agencies' initial antitrust assessment of the 
transaction.
    The Commission also proposes adding two new requirements for the 
Updated HSR Filing: updated transaction agreements and updated 
information about subsidies from Foreign Entities of Concern. Though 
the voluntary withdrawal and refiling process is only available if the 
transaction is materially the same, the Commission believes that the 
Agencies would benefit from having a complete understanding of all 
aspects of the status of and rationale for the transaction, including 
any changes that have occurred since the day the HSR Filing was 
submitted. Therefore, the Commission proposes requiring that the 
Updated HSR Filing include the latest version of the transaction 
agreements, including the most recent drafts, if a final version has 
not been executed. The Commission believes this proposed requirement 
would not impose a substantial burden, since this would be a limited 
set of documents that should be readily available to the acquiring 
person.
    The Commission also proposes requiring that the Updated HSR Filing 
include updated information regarding Subsidies from Foreign Entities 
or Governments of Concern, which is discussed below at III.E.1. The 
Commission believes that most updated HSR Filings would reflect no new 
information related to subsidies given the short period of time since 
the original HSR Filing. However, if new information about subsidies 
from foreign entities of concern were to become available, the 
Commission believes that it would be consistent with Congressional 
intent for the Agencies to have access to this information.

[[Page 42184]]

Proposed Changes to the Instructions

III. Part 803 Appendix A and Appendix B

    As mentioned above, the Agencies are developing an e-filing 
platform through which filers would submit information required by the 
HSR Rules via an online portal. As a result, this NPRM does not contain 
a new draft Form. Instead, this NPRM presents the information 
requirements as Instructions for collecting and submitting documents 
and information required by the HSR Rules. The proposed Instructions 
reorganize the information to reflect the planned layout of the e-
filing platform in development, which would be described in any final 
rule. Prior to the implementation of the e-filing platform, the 
proposed Instructions contemplate filers would submit the proposed 
requests for information and narratives via uploads in a standard 
format such as PDF and Excel.
    The proposed changes to the information that filing parties would 
be required to provide are detailed below. The Commission recognizes 
that, in total, these proposed changes would be significant and impose 
additional burden on some filing parties. Some proposed changes ask for 
additional information or documents that the Commission believes are in 
the possession of the filing persons in a form that could be readily 
uploaded into the e-filing platform. Other proposed changes would 
require filing parties to compile or generate the requested information 
specifically for the HSR Filing, such as items requesting narrative 
responses, which would involve additional effort. As explained below, 
the Commission has determined that the additional burden associated 
with these proposed changes is justified because the requested 
documentary material and information is necessary and appropriate for 
effective and efficient review of HSR Filings to determine within the 
initial waiting period whether the transaction may, if consummated, 
violate the antitrust laws.\21\
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 18a(d).
---------------------------------------------------------------------------

    Based on the Agencies' experience conducting merger investigations, 
and as discussed above, the Commission believes that the limited 
information currently available to the Agencies in the HSR Filing is no 
longer sufficient to conduct an effective initial screening of the 
transaction for all types of competitive harm that may result from the 
transaction. The proposed set of reorganized revenue information, 
additional documents, and narrative responses would create a much more 
complete, accurate, and robust basis on which to screen the transaction 
for the various potential competitive effects, including those that 
arise from non-horizontal transactions or combinations involving 
competing employers. These proposals would also provide a more reliable 
and robust set of information to determine when the transaction does 
not warrant an in-depth investigation, which often requires a 
substantial investment of time and resources for both the investigating 
agency and the merging parties. Based on the Agencies' experience in 
reviewing and challenging illegal mergers, the proposals target the 
information that is most relevant and readily available to filing 
persons and would require it to be presented in a coherent and 
organized way that will facilitate quick antitrust review by the 
Agencies during the initial waiting period. But the Commission welcomes 
comments on the burden associated with and the appropriate balance of 
having to provide information in the form of revenues, documents, and 
narratives as part of the proposed changes in this NPRM and invites 
alternative proposals that meet the objectives described below.
    At their core, the proposed changes are motivated by the 
fundamental purpose of the HSR Act, which is to allow the Agencies, 
within a short period of time to review the information submitted with 
the Filing and identify potentially problematic transactions prior to 
consummation, and, where appropriate, initiate an in-depth review by 
issuing Second Requests. The fact that the Agencies must conduct their 
evaluation in an initial waiting period of 15 or 30 days, depending on 
the transaction type, means that the Agencies must have enough 
information to consider a wide range of potential effects on 
competition on an expedited basis. Based on the cumulative learning of 
the Commission and Assistant Attorney General over the course of 
decades of investigations, the Commission proposes requiring new 
information and narratives to address particular areas where the 
Agencies have found specific deficiencies in the type of information 
currently required by the Form. In addition, this NPRM would implement 
changes required by the 2022 Amendments, which are consistent with the 
need for sufficient information to screen for all types of competitive 
concerns.
    Despite the added burden for filing persons, on balance, the 
Commission believes that the benefit to the Agencies' merger review 
would be significant and would help address information asymmetries 
between Agency staff and the filing persons in the initial waiting 
period. The Agencies expend substantial resources during the initial 
waiting period to discover and confirm basic business information about 
the filing persons, information that is well-known to them but not to 
Agency staff and is not available from any other source. These 
information asymmetries have become more acute as deals and companies 
have become more complex. In the Commission's experience, the 
inefficiency created by information asymmetries can overwhelm the 
initial review process, especially when the volume of HSR reportable 
transactions is high.\22\ The proposed changes would also benefit 
filing persons where information contained in an HSR Filing would 
demonstrate to the Agencies that the transaction at issue does not need 
further investigation. Indeed, both the Agencies and filing persons 
have an interest in ensuring that HSR Filings are robust enough for the 
Agencies to quickly identify transactions that do not require further 
investigation during the initial waiting period. It is the Commission's 
aim to be cognizant of all such interests in proposing the substantial 
changes contained in this NPRM.
---------------------------------------------------------------------------

    \22\ The Agencies experienced a surge in HSR reportable 
transactions during 2021 and 2022. For instance, FY 2021 HSR 
reportable transactions were double those of FY 2020 (1,637 versus 
3,520), and in FY 2022, reportable HSR transactions remained high, 
at over 3,200. The pace and volume of HSR filings (generally two 
filings per transaction) during that time (in addition to on-going 
merger investigations) required the Agencies to adjust their HSR 
review process, including suspending the granting of requests for 
early termination of the waiting period.
---------------------------------------------------------------------------

    For ease of reference, the Commission includes the following 
materials regarding the proposed changes in this NPRM:
     An outline of the reorganization contemplated in the 
proposed Instructions,
     A chart that identifies proposed new locations of the 
current Items of the Form including whether substantive changes are 
proposed, and
     A chart of proposed new categories of required 
information.
    These materials appear immediately below.
Proposed Instructions Outline
 General Instructions and Information
 Ultimate Parent Entity Information
    [cir] UPE Details
    [cir] Organization Structure
 Transaction Information
    [cir] Parties
    [cir] Filing Fee
    [cir] Transaction Details

[[Page 42185]]

    [cir] Transaction Description
    [cir] Joint Ventures
    [cir] Agreements and Timeline
 Competition and Overlaps
    [cir] Business Documents
    [cir] Competition Analysis
    [cir] NAICS Codes
    [cir] Controlled-Entity Overlaps
    [cir] Minority-Held Entity Overlaps
    [cir] Prior Acquisitions
 Additional Information
    [cir] Subsidies from Foreign Entities or Governments of Concern
    [cir] Defense or Intelligence Contracts
    [cir] Identification of Communications and Messaging Systems
    [cir] Other Jurisdictions
 Certification
 Affidavits

     Cross Reference Between Current Form and Proposed Instructions
------------------------------------------------------------------------
       Current form item           New location     Substantive changes?
------------------------------------------------------------------------
Fee Information...............  Transaction        No.
                                 Information/
                                 Filing Fee.
Corrective Filing.............  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Cash Tender Offer.............  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Bankruptcy....................  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Foreign Jurisdictions.........  Additional         Yes.
                                 Information/
                                 Other
                                 Jurisdictions.
Early Termination.............  Transaction        No.
                                 Information/
                                 Transaction
                                 Description.
Item 1(a).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(b).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(c).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(d).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(e).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(f).....................  Ultimate Parent    Yes.
                                 Entity
                                 Information/
                                 Organization
                                 Structure.
Item 1(g).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 1(h).....................  Ultimate Parent    Yes.
                                 Entity
                                 Information/UPE
                                 Details.
Item 2(a).....................  Transaction        No.
                                 Information/
                                 Parties.
Item 2(b).....................  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Item 2(c).....................  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Item 2(d).....................  Transaction        No.
                                 Information/
                                 Transaction
                                 Details.
Item 3(a) (Entities)..........  Transaction        No.
                                 Information/
                                 Parties.
Item 3(a) (Description).......  Transaction        Yes.
                                 Information/
                                 Transaction
                                 Description.
Item 3(b).....................  Transaction        Yes.
                                 Information/
                                 Agreements and
                                 Timeline.
Item 4(a).....................  Ultimate Parent    No.
                                 Entity
                                 Information/UPE
                                 Details.
Item 4(b).....................  UPE Information/   No.
                                 UPE Details.
Item 4(c).....................  Competition and    Yes.
                                 Overlaps/
                                 Business
                                 Documents.
Item 4(d).....................  Competition and    Yes.
                                 Overlaps/
                                 Business
                                 Documents.
Item 5(a).....................  Competition and    Yes.
                                 Overlaps/NAICS
                                 Codes.
Item 5(b).....................  Transaction        Yes.
                                 Information/
                                 Joint Ventures.
Item 6(a).....................  Ultimate Parent    Yes.
                                 Entity
                                 Information/
                                 Organization
                                 Structure.
Item 6(b).....................  Ultimate Parent    Yes.
                                 Entity
                                 Information/
                                 Organization
                                 Structure.
Item 6(c)(i)..................  Competition and    Yes.
                                 Overlaps/
                                 Minority-Held
                                 Entity Overlaps.
Item 6(c)(ii).................  Competition and    Yes.
                                 Overlaps/
                                 Minority-Held
                                 Entity Overlaps.
Item 7(a)-(d).................  Competition and    Yes.
                                 Overlaps/
                                 Controlled-
                                 Entity Overlaps.
Item 8(a).....................  Competition and    Yes.
                                 Overlaps/Prior
                                 Acquisitions.
------------------------------------------------------------------------


         Proposed New Requirements and Categories of Information
------------------------------------------------------------------------
           Proposed new sections                      Location
------------------------------------------------------------------------
New Definitions...........................  General Instructions and
                                             Information.
Document Log..............................  General Instructions and
                                             Information.
Translations..............................  General Instructions and
                                             Information.
Organization of Controlled Entities.......  Ultimate Parent Entity
                                             Information/Organization
                                             Structure.
Identification of d/b/a or f/k/a names....  Passim.
Identification of Additional Minority       Ultimate Parent Entity
 Interest Holders.                           Information/Organization
                                             Structure.
Narrative Describing Ownership Structure    Ultimate Parent Entity
 of the Acquiring and Acquired Entities.     Information/Organization
                                             Structure.
Organizational Chart for Funds and Master   Ultimate Parent Entity
 Limited Partnerships.                       Information/Organization
                                             Structure.
Identification of Other Types of Interest   Ultimate Parent Entity
 Holders that May Exert Influence.           Information/Organization
                                             Structure.
Identification of Officers and Directors..  Ultimate Parent Entity
                                             Information/Organization
                                             Structure.
Description of Acquiring Person...........  Ultimate Parent Entity
                                             Information/Transaction
                                             Details.
Narrative Describing Transaction Rationale  Ultimate Parent Entity
                                             Information/Transaction
                                             Details.
Diagram of the Transaction................  Ultimate Parent Entity
                                             Information/Transaction
                                             Details.
Identification of Related Transactions....  Ultimate Parent Entity
                                             Information/Transaction
                                             Details.
Expansion of Transaction Agreements to be   Ultimate Parent Entity
 Produced.                                   Information/Agreements and
                                             Timeline.
Production of other Agreements between the  Ultimate Parent Entity
 Acquiring and Acquired Persons.             Information/Agreements and
                                             Timeline.
Provision of a Transaction Timeline.......  Ultimate Parent Entity
                                             Information/Agreements and
                                             Timeline.
Production of Certain Documents of the      Competition and Overlaps/
 Supervisory Deal Team Lead(s).              Business Documents.
Production of Certain Strategic Plans.....  Competition and Overlaps/
                                             Business Documents.
Production of Certain Drafts..............  Competition and Overlaps/
                                             Business Documents.
Organizational Chart of Authors and         Competition and Overlaps/
 Certain Recipients of Documents.            Business Documents.
Narrative Describing Horizontal Overlaps..  Competition and Overlaps/
                                             Competition Analysis.
Narrative Describing Supply Relationships.  Competition and Overlaps/
                                             Competition Analysis.
Narrative Describing Labor Markets........  Competition and Overlaps/
                                             Competition Analysis.

[[Page 42186]]

 
Identification of Minority Held Entities    Competition and Overlaps/
 with Revenue Overlaps.                      Minority-Held Entity
                                             Overlaps.
Provision of Geolocation for Certain        Competition and Overlaps/
 Locations of Operations.                    Controlled-Entity Overlaps.
Identification of Additional Prior          Competition and Overlaps/
 Acquisitions.                               Prior Acquisitions.
Disclosure of Subsidies from Foreign        Additional Information.
 Entities or Governments of Concern.
Identification of Certain Defense or        Additional Information.
 Intelligence Contracts.
Identification of Communications and        Additional Information.
 Messaging Systems.
Mandatory Disclosure of Foreign Filings...  Additional Information.
Voluntary Waivers for International         Additional Information.
 Competition Authorities.
Voluntary Waivers for State Attorneys       Additional Information.
 General.
Statement of Penalties for False            Certification.
 Statements.
Prevention of Destruction of Documents....  Certification.
------------------------------------------------------------------------

    The following discussion of the proposed changes in this NPRM 
tracks the Proposed Instructions Outline above, explaining which 
information requirements are materially the same as those currently 
included in the Form and Instructions, which the Commission proposes 
changing, and which are proposed new categories of required 
information.
    Throughout the proposed Instructions, references to paper and DVDs 
have been eliminated, as discussed in II.A. above.

A. General Instructions and Information

    The Commission proposes creating a General Instructions and 
Information section within the proposed Instructions that would largely 
parallel the General section of the current Instructions but would be 
significantly reorganized. Within the proposed General Instructions and 
Information section, the Commission proposes substantive changes to the 
following sections: Filing Person, Definitions, Responses, and 
Translations, as detailed below.
1. Definitions and Explanation of Terms
    The Commission proposes creating two new definitions and deleting 
an existing definition within the proposed Instructions.
a. Economic Research Service's (ERS's) Commuting Zones (CZ)
    The Commission proposes adding a definition for Economic Research 
Service's Commuting Zones. As discussed below at III.D.2.c., the 
Commission proposes new questions that would require the submission of 
information about the filing person's employees to aid the Agencies' 
evaluation of the potential impact of proposed transactions on labor 
markets. These proposed questions would require data to be submitted 
using the Department of Agriculture's Economic Research Service 
Commuting Zones for the year 2000. These codes are available at https://www.ers.usda.gov/data-products/commuting-zones-and-labor-market-areas/.
b. North American Product Classification System (NAPCS) Data
    The Commission proposes eliminating the reporting of 10-digit North 
American Product Classification System (``NAPCS'') based codes, as 
discussed in more detail below at III.D.3. Thus, the Commission 
proposes deleting the NAPCS definition from the proposed Instructions.
c. Standard Occupational Classification
    The Commission proposes adding a definition for Standard 
Occupational Classification. As discussed below at III.D.2.c., the 
Commission proposes new questions that would require the submission of 
information about the filing person's employees to aid the Agencies' 
evaluation of the impact of proposed transactions on competition for 
workers in labor markets. The proposed definition of Standard 
Occupational Classification (``SOC'') would require filers to submit 
data by the first six digits of the relevant code, as published by the 
United States Bureau of Labor Statistics, available at https://www.bls.gov/soc/2018/#classification.
2. Filing
    As discussed above at II.B., the Commission proposes amending Sec.  
803.2 and deleting Sec.  803.2(b)(1)(v) to require filing persons to 
submit separate forms when filing as an acquiring and acquired person. 
The proposed Instructions would also reflect this proposed change.
3. Responses
    The Commission proposes replacing the current Responses section 
with a new Responses section that would provide details on how to 
provide the information responsive to the proposed new questions. This 
would include eliminating instructions that are specific to filings 
made on paper or DVD, see above at II.A. The proposed revised Responses 
section would also describe the information that filing persons would 
need to provide in a log of responsive documents and narrative 
responses to be submitted with an HSR Filing. This information would 
generally be the same as the information currently required for 
documents submitted in response to Items 4(c) and 4(d) of the current 
Form, with two proposed expansions.
    First, the Commission proposes requiring the filing person to 
identify the request(s) to which the document would be responsive. 
Though the proposed Instructions do not include item numbers at this 
time, indented and bolded headings in the proposed Instructions should 
each be considered a separate request. The Commission routinely 
requires this type of referencing for document submissions pursuant to 
compulsory process, including in response to a Second Request, and it 
is extraordinarily helpful in quickly identifying materials responsive 
to a specific request. This proposed requirement would allow the 
Agencies to understand the content of filings more quickly by providing 
a cross-reference between information and documents, facilitating a 
more efficient review.
    Second, the Commission proposes modifying the requirements for 
identification of authors of documents prepared by third parties. For 
documents prepared by third parties at the request of a filing person, 
such as market studies, quality of earnings analyses, confidential 
information memoranda, management presentations, or board 
presentations, the Commission proposes that, in addition to providing 
the name of the third party that prepared the document, the filing 
person would be required to provide the name, title, and company of the 
individual within the filing person who supervised the preparation of 
the document or for whom the document

[[Page 42187]]

was prepared. Understanding who, within the filing person, was 
responsible for overseeing or receiving the work of outside consultants 
would materially assist the Agencies in identifying key decision-makers 
for the transaction. In the case of documents that were not 
commissioned by the filing person, such as subscription market reports, 
unsolicited banker's books, or documents received from the other filing 
person, the Commission proposes that the filing person would only be 
required to list the document title and name of the third party that 
prepared the document.
    These proposed changes would allow the Agencies to quickly assess 
which documents were key to the decision to pursue the transaction and 
who within the filing person coordinated the assessment that resulted 
in that decision.
4. Translations
    As noted above at II.D., the Commission proposes amending Sec.  
803.8 to require the filing person to submit English translations of 
all foreign-language documents. The proposed Instructions would also 
reflect this change.

B. Ultimate Parent Entity Information

    The Commission proposes the creation of an Ultimate Parent Entity 
(UPE) Information section within the proposed Instructions. Currently, 
information about the structure of the acquiring and acquiring persons 
is required in various sections of the Form: Item 1 contains basic 
contact information; Item 2 identifies the ultimate parent entities; 
Item 3 identifies the acquiring and acquired entities; and Item 6 
identifies certain controlled and minority-held entities, as well as 
certain minority holders of the filing person. The Commission proposes 
the reorganization, clarification, and expansion of these items to 
require additional information about the acquiring person and acquired 
entity(s) in order for the Agencies to receive a more complete picture 
of the scope of the operations of each, and to identify points of 
contact for questions about the HSR Filing or potential Second 
Requests, as well as key interest holders. These proposed changes, 
discussed below, would fall within the following proposed categories: 
UPE Details and Organization Structure.
1. UPE Details
    The proposed UPE Details section within the proposed Instructions 
would contain most of the information currently required in Item 1 of 
the Form. The Commission proposes adding a new Size of Person 
Stipulation item that would allow the filing person to stipulate that 
the size of person test is met, when applicable, making it easier for 
staff to determine that the size of person test is met and streamlining 
the review process as a result.
    The Commission also proposes clarifying which financials are 
required from acquiring persons who are natural persons. As a result of 
feedback from filers over the years, the Commission is aware that this 
item causes confusion. The proposed language in the Instructions would 
make it clear that natural persons who are acquiring persons must 
include the annual reports and/or annual audit reports of (1) the 
acquiring entity(s) and any entity controlled by the natural person 
whose dollar revenues contribute to a NAICS overlap, and (2) the 
highest-level entity(s) the natural person controls. It is the intent 
of the Commission that the Instructions require this information from 
natural persons, and the proposed change would make that intent clear.
    Finally, the Commission proposes requiring all filing persons to 
identify the person to whom Second Requests should be addressed. 
Current Item 1(g) requires the identification of two individuals to 
contact regarding the HSR Filing, and current Item 1(h) requires the 
identification of an individual located within the United States for 
the limited purpose of receiving a notice of a Second Request. But the 
Instructions currently limit application of Item 1(h) to filings made 
by foreign persons, so for U.S. filers, Second Requests are sent to the 
person identified in Item 1(g). The Commission now understands that 
U.S. filing persons sometimes have separate points of contact to answer 
questions regarding the HSR Filing as compared to questions regarding 
the receipt of Second Requests. Therefore, the Commission proposes 
requiring all filing persons to separately provide contacts for 
questions related to the HSR Filing and Second Requests.
    These proposed changes would provide clarity for filing persons, 
and the Agencies would benefit from receiving more precise information 
about the UPE.
2. Organization Structure
    The proposed Organization Structure section within the proposed 
Instructions would expand the required information about how the UPE is 
organized and the identity of other individuals and entities that may 
have influence over business decisions or access to confidential 
business information. The proposal would require the identification of 
entities within the acquiring person or acquired entity, minority 
shareholders, and other non-controlling entities, and create new 
requirements to identify certain other interest holders that may exert 
influence, as well as officers, directors, and board observers.
a. Entities Within the Acquiring Person and Acquired Entity
    The proposed Entities Within the Acquiring Person and Acquired 
Entity section would contain information currently required by Items 
1(f) and 6(a) of the Form. Item 1(f) requires the identification of the 
acquiring entity(s) or acquired entity(s) (as appropriate). Item 6(a) 
requires the acquiring person to list all entities it controls with 
total assets of $10 million or more (though foreign entities with no 
sales into the United States may be omitted). The acquired person 
currently has the same obligation, but the scope is limited to the 
acquired entity(s); the acquired person is not required to provide 
information about entities that are not part of the transaction. The 
Commission proposes requiring additional information about the reported 
entities within the filing persons.
    First, the Commission proposes requiring filing persons to organize 
the list of controlled entities by operating company or business. As 
filing persons have become more complex, an alphabetically or 
geographically organized list of the controlled entities, which is 
currently permitted by Item 6(a) of the Form, often does not provide 
the Agencies with a sufficient overview of the scope of the businesses 
that the acquiring person and acquired entity(s) control. Some filers 
currently organize the list of entities held by the acquiring person or 
acquired entity by operating company, and in the Commission's 
experience, this is a much more useful way to present the information. 
Understanding which companies are part of an operating group or 
portfolio company would allow staff to identify the actual market 
participants from among all legal entities. The Commission thus 
proposes requiring that lists of controlled entities be submitted in 
this manner to aid the Agencies' review during the initial waiting 
period.
    Second, for each such operating company or business, the Commission 
proposes that filers identify the name(s) by which the company or 
business does business, as well as any name(s) by which it formerly did 
business within the three years prior to filing. While it remains 
important for the Agencies to receive legal entity names, these names

[[Page 42188]]

are often unrelated to the names used in the marketplace and may be 
unfamiliar to industry participants. Being able to connect the legal 
names to the ``doing business as'' and ``formerly known as'' names 
would greatly assist the Agencies in understanding the scope of the 
operations of the acquiring person and acquired entity and allow the 
identification of other public information about the entity during the 
initial waiting period.
b. Minority Shareholders and Other Non-Controlling Entities
    The proposed Minority Shareholders and Other Non-Controlling 
Entities section would contain information currently required by Item 
6(b) of the Form, which requires identification of holders of 5% or 
more, but less than 50%, of the acquiring UPE and acquiring entity by 
the acquiring person, and of the acquired entity(s) by the acquired 
person. In order to provide the Agencies with a more complete 
understanding of the individuals or entities that have significant 
investments in the filing persons, the Commission proposes amending the 
current Item 6(b) requirements and expanding them to require the 
identification of additional minority interest holders.\23\
---------------------------------------------------------------------------

    \23\ The acquisition of a minority position may be reportable 
under the Act, and failure to make an HSR Filing and observe the 
waiting period may result in significant civil penalties. 15 U.S.C. 
18a(g).
---------------------------------------------------------------------------

    The identification of certain minority holders of the filing 
persons has been required since the first iteration of the Form in 
1978, though the level of detail that has been required has changed 
over time.\24\ Prior to 2011, Item 6(b) only required the 
identification of holders of minority interests in voting securities. 
In 2011, Item 6(b) was amended to require the identification of holders 
of 5% or more but less than 50% of unincorporated entities.\25\ The 
Commission, however, made an exception for limited partnerships and 
only required the identification of the general partner. At that time, 
the Commission understood that limited partners had no control over the 
operations of the fund or portfolio companies and therefore did not see 
them as essential to the Agencies' initial review.\26\ Since that time, 
the Commission has come to understand that the Agencies would benefit 
from more complete information about all minority holders of the filing 
parties, including the identification of limited partners. As a result, 
the Commission proposes collecting information about minority holders 
of all entities within the acquiring person that are related to the 
transaction and requiring the identification of certain limited 
partners.
---------------------------------------------------------------------------

    \24\ See 43 FR 33450 (July 31, 1978); 52 FR 7066 (Mar. 6, 1987); 
76 FR 42471 (July 19, 2011).
    \25\ 76 FR 42471 (July 19, 2011).
    \26\ Proposed Rules, 75 FR 57110, 57118 (Sept. 17, 2010), 
adopted in 2011, 76 FR 42471 (July 19, 2011).
---------------------------------------------------------------------------

    The current limitation on providing minority holder information for 
only the acquiring ultimate parent entity and acquiring entity often 
prevents the identification of key interest holders. For example, co-
investors often do not invest at the UPE or acquiring entity level but 
may hold a 5% or greater interest in an entity that is in between the 
UPE and the acquiring entity in the ownership structure. In particular, 
when funds make acquisitions, it can be the case that more than one 
fund may be substantively involved in the acquisition, using a variety 
of corporate or unincorporated entity types. The identification of not 
only the controlling person but also significant minority investors can 
be an important component of the Agencies' evaluation of the potential 
competitive effects of the transaction during the initial waiting 
period,\27\ and obtaining a broader picture of relevant minority 
investments, where they exist, would aid the Agencies in their 
assessment of the nature of competitive decision-making within the 
relevant entity.
---------------------------------------------------------------------------

    \27\ 43 FR 33450, 33531 (July 31, 1978).
---------------------------------------------------------------------------

    In the case of limited partnerships, Item 6(b) currently does not 
require the identification of limited partners, even if they hold 5% or 
more. At the time this item was adopted, the Commission understood that 
limited partners had no control over the operations of the fund or 
portfolio companies and therefore did not see them as essential to the 
Agencies' initial review.\28\ However, after more than a decade, the 
Commission now believes that it is inappropriate to make 
generalizations regarding the role of investors in limited partnership 
structures. Identification of limited partners can provide valuable 
information about co-investors and lead to the identification of 
potentially problematic overlapping investments resulting from the 
transaction that could violate Section 7.\29\ Thus, it is important 
that the Agencies know the identities of limited partners to understand 
the transaction in its entirety and to uncover investment relationships 
that may have competitive significance.
---------------------------------------------------------------------------

    \28\ Proposed Rules, 75 FR 57110, 57118 (Sept. 17, 2010), 
adopted in 2011, 76 FR 42471 (July 19, 2011).
    \29\ See, e.g., In re Red Ventures Holdco and Bankrate, FTC Dkt. 
C-4627 (Nov. 3, 2017) (enforcement action involving overlapping 
limited partnership holdings); United States v. Dairy Farmers of 
Am., 426 F. 3d 850 (6th Cir. 2005) (DFA stakes in competitors Flav-
O-Rich and Southern Belle violated Section 7).
---------------------------------------------------------------------------

    Accordingly, for the acquiring person, the Commission proposes the 
reporting of certain minority holders of (1) the acquiring entity, (2) 
any entity directly or indirectly controlled by the acquiring entity, 
(3) any entity that directly or indirectly controls the acquiring 
entity, and (4) any entity within the acquiring person that has been or 
will be created in contemplation of, or for the purposes of, 
effectuating the transaction. For entities affiliated with a master 
limited partnership, fund, or investment group, the ``doing business 
as'' or ``street name'' of that group would also be required.
    Under these proposals, minority holders that would have to be 
reported would include all entities or individuals, including limited 
partners, that hold 5% or more of the voting securities or non-
corporate interests of one of the identified entities. To be clear, the 
Commission proposes requiring limited partnerships to identify all 
holders of 5% or more, but less than 50%, to harmonize the requirement 
for limited partnerships with the requirements for limited liability 
companies and corporations. The requirement to identify the general 
partner of a limited partnerships would remain the same.
    The Commission acknowledges that these proposed requirements may 
require significant additional information from investment entities, 
such as funds and master limited partnerships, for which organizational 
structures are often more complex. But the Commission believes that the 
disparate treatment of LLCs as compared to limited partnerships is no 
longer appropriate. Further, the complexity of these organizational 
structures makes it all the more important that the filing person 
provide this information with the HSR Filing. The complex structure of 
investment entities is not adequately captured by the current Form, and 
there is often no other source for Agencies to learn of these 
relationships. Though the introduction of the definition of 
``associate'' in 2011 \30\ provides the Agencies with some valuable 
information with which to identify competitively significant 
relationships that exist through related holdings, it does not provide 
enough detail about all of the potential players involved in the 
structure of the acquiring person. As a result, the Commission believes 
that the

[[Page 42189]]

proposed identification of all minority investors of 5% or more in 
entities related to the transaction would allow the Agencies to more 
quickly identify potential competitive issues related to these holdings 
during the initial waiting period.
---------------------------------------------------------------------------

    \30\ 76 FR 42471 (July 19, 2011).
---------------------------------------------------------------------------

    To reduce the additional burden associated with these proposed 
changes, the Commission proposes limiting the information about 
minority holders collected from the acquired person. Currently, the 
acquired person must list certain minority interest holders of the 
acquired entity(s), but this requirement does not distinguish between 
minority holders that will be cashed out as a result of the 
transaction, and those that will continue investment after the 
transaction. On balance, the Commission believes that identifying only 
the minority holders that would continue to have an interest in the 
acquired entity(s), directly or indirectly, would provide the most 
relevant information to the Agencies during the initial waiting period. 
Therefore, the Commission proposes that the acquired person only be 
required to identify minority holders of the acquired entity(s) that 
will continue to hold interest in the acquired entity(s) or will 
acquire interests in any entity within the acquiring person as a result 
of the transaction. The Commission recognizes that in certain 
transactions to which Sec.  801.30 applies, the acquired person might 
not have this information. In such cases, it would be permissible for 
the acquired person to indicate that the information is unknown.
c. Other Types of Interest Holders That May Exert Influence
    The proposed Other Types of Interest Holders that May Exert 
Influence section would require the identification of entities or 
individuals that may have material influence on the management or 
operations of the acquiring person beyond those with the minority 
interests discussed above. Because these other interest holders retain 
the ability to influence decision-making by the acquiring person after 
the transaction, it is important for the Agencies to know about these 
relationships during the initial waiting period.
    The Commission has long recognized the potential influence of 
minority holders and the possibility that they may seek to change 
competitive decisions of the target firm.\31\ In the 1978 SBP, the 
Commission explained that competitors, customers, or suppliers holding 
a significant interest in one of the parties can raise antitrust 
concerns.\32\ As originally conceived, minority holdings reported in 
Item 6 were designed to alert the Agencies to situations in which the 
potential antitrust impact of the transaction does not result solely or 
directly from the transaction itself, but may arise from direct or 
indirect shareholder relationships between the parties to the 
transaction.\33\
---------------------------------------------------------------------------

    \31\ See United States v. E.I. du Pont de Nemours & Co., 353 
U.S. 568 (1957) (du Pont's 23% stake in General Motors violated 
Section 7 by giving it an advantage over other suppliers and thereby 
resulting in a substantial lessening of competition). In considering 
the proper remedy, the Supreme Court found that divestiture of only 
voting rights was insufficient due to the on-going ``special 
relationship'' could still result in competitive harm. United States 
v. E.I. du Pont de Nemours & Co., 366 U.S. 316, 332 (1961).
    \32\ 43 FR 33450, 33531-32 (July 31, 1978).
    \33\ Id. at 33531.
---------------------------------------------------------------------------

    As entity structures have evolved and become more complex, the 
Commission now believes that relationships beyond those created by 
holding voting securities or non-corporate interests can give rise to 
similar and significant competitive concerns. For instance, some credit 
arrangements permit the creditor to exercise rights and influence 
similar to those of equity holders. Additionally, some equity interests 
that do not provide rights to vote for the board of directors can, 
nevertheless, provide rights to vote on or influence business practices 
of the company, including investments in future product or service 
lines. Further, contractual arrangements allowing individuals or 
entities to nominate directors or board observers have proliferated. In 
addition, some entities outsource the management of operations to third 
parties that do not beneficially own interests in the company. Each of 
these relationships can be relevant to understanding the transaction 
and its potential competitive effects. Without information about these 
relationships, the Agencies cannot easily identify those transactions 
where these relationships exist and may affect the competitive dynamics 
before and after the transaction.
    As a result, the Commission proposes that the acquiring person 
identify certain individuals (other than employees of the acquiring 
person) or entities that, in relation to the acquiring entity or any 
entity it directly or indirectly controls or is controlled by, (i) 
provide credit; (ii) hold non-voting securities, options, or warrants; 
(iii) are board members or board observers, or have nomination rights 
for board members or board observers; or (iv) have agreements to manage 
entities related to the transaction. Credit relationships would be 
limited to creditors that have, or would have, in conjunction with or 
result of the transaction, provided credit totaling 10% or more of the 
value of the entity in question. Holders of non-voting securities, 
warrants, or options would be limited to those the value of which 
equals or exceeds 10% of the entity or could be converted to 10% or 
more of the voting securities or non-corporate interests of the 
company.
    The Commission recognizes that the compilation of this information 
would add to the burden of preparing an HSR Filing for an acquiring 
person with a complicated investment structure, but it is important 
that the HSR Filing contain this information because individuals or 
entities that fall into any of the four categories described above can 
have a material influence on the operations or strategy of the 
acquiring person. As with minority investors, these relationships can 
affect the competition analysis of the transaction, and the proposed 
identification of these individuals or entities would allow the 
Agencies to know the identity of those in a position to influence post-
merger competition decisions.
d. Officers, Directors, and Board Observers
    The proposed Officers, Directors, and Board Observers section would 
require the identification of the officers, directors, or board 
observers (or in the case of unincorporated entities, individuals 
exercising similar functions) of all entities within the acquiring 
person and acquired entity, as well as the identification of other 
entities for which these individuals currently serve, or within the two 
years prior to filing had served, as an officer, director, or board 
observer (or in the case of unincorporated entities, roles exercising 
similar functions). This information would allow the Agencies to know 
of existing, prior, or potential interlocking directorates and to 
assess the competitive implications of such relationships under both 
Sections 7 and 8 of the Clayton Act.\34\
---------------------------------------------------------------------------

    \34\ Although Section 8 does not technically apply to 
unincorporated entities, information sharing and coordination can 
still raise concerns under Section 1 of the Sherman Act.
---------------------------------------------------------------------------

    Section 8 of the Clayton Act generally prohibits a person from 
serving as an officer or director of competing corporations, subject to 
certain categorical and de minimis exceptions. This section of the 
Clayton Act aims to prevent information sharing and coordination 
between competitors through a per se ban that prohibits the same 
individual from serving as an

[[Page 42190]]

officer or director of two competing firms.\35\
---------------------------------------------------------------------------

    \35\ Like Section 7, Section 8 was designed to ``nip in the bud 
incipient violations of the antitrust laws by removing the 
opportunity or temptation to such violations through interlocking 
directorates.'' United States v. Sears, Roebuck & Co., 111 F. Supp. 
614, 616 (S.D.N.Y. 1953).
---------------------------------------------------------------------------

    In the Agencies' experience, many acquiring persons have board 
members who also serve on the boards of other companies. As a result, 
the Agencies often investigate existing board relationships as well as 
potential interlocks that would result from the transaction as part of 
its initial review. Section 8 bars interlocks that arise through rights 
to appoint board members to a competitor \36\ or officers or directors 
serving on the boards of competing companies. Investment entities that 
acquire board seats across a diverse portfolio of companies may be 
particularly likely to encounter Section 8 compliance issues via a 
merger or acquisition.\37\
---------------------------------------------------------------------------

    \36\ See, e.g., Complaint, United States v. CommScope Inc., 
1:07-cv-2200 (D.D.C.) (Dec. 6, 2007) https://www.justice.gov/atr/case-document/complaint-69 (alleging violations of Sections 7 and 8 
where buyer also acquired rights to appoint members to the board of 
its competitor). See also Press Release, U.S. Dep't of Just., 
Tullett Prebon and ICAP Restructure Transaction after Justice 
Department Expresses Concerns about Interlocking Directorates, (Jul. 
14, 2016). The Department of Justice has announced its intent to 
reinvigorate Section 8 enforcement, after seven directors resigned 
from corporate board positions. See Press Release, U.S. Dep't of 
Just., Justice Department's Ongoing Section 8 Enforcement Prevents 
More Potentially Illegal Interlocking Directorates (Mar. 9, 2023), 
https://www.justice.gov/opa/pr/justice-department-s-ongoing-section-8-enforcement-prevents-more-potentially-illegal.
    \37\ The Agencies also consider whether the acquiring person 
would be expanding into the business of the other company that 
shared a board member such that the two companies would have 
competing sales in excess of the de minimis amounts permitted by 
Section 8.
---------------------------------------------------------------------------

    Currently, filers are not required to disclose the identity of the 
members of their boards of directors, and this makes it difficult for 
the Agencies to complete their assessment of potential Section 8 issues 
during the initial waiting period. Having information about potential 
interlocking directorates in the HSR Filing would allow the Agencies to 
take steps to prevent the sharing of board-level confidential 
information much more quickly. This information is also relevant to the 
competition analysis of the transaction, as well as concerns about 
potential gun-jumping, which may violate the Act or Section 1 of the 
Sherman Act.\38\ This is particularly important given that post-merger 
enforcement of Section 8's per se ban can be ineffective after the 
individual has been privy to the confidential business information of 
two competitors: Section 8 provides a one-year grace period to remedy 
an illegal interlock that arises after the individual is elected or 
chosen to be an officer or director.\39\ Moreover, Section 8 does not 
provide for civil penalties or other monetary relief, only injunctions 
barring the individual from serving on the two boards.
---------------------------------------------------------------------------

    \38\ Any sharing of competitive information between or among 
competitors, including during the pendency of merger review, that 
results in competitive harm may be a violation of Section 1 of the 
Sherman Act, or Section 5 of the FTC Act. Complaint, United States 
v. Gemstar, cv 1:03-00198 (D.D.C. 2003), https://www.justice.gov/atr/case-document/complaint-108; Complaint, In re Insilco Corp., No. 
C-3783 (F.T.C. 1998), https://www.ftc.gov/sites/default/files/documents/cases/1998/01/insilcocmp.pdf.
    \39\ 15 U.S.C. 19(b).
---------------------------------------------------------------------------

    Information about board observers can also be relevant to the 
Agencies' analysis of the proposed transaction. Board observers are not 
subject to the Section 8 ban on interlocking directorates, and yet may 
have access to the same materials that are shared with officers and 
directors. In December 2020, the Commission issued an advance notice of 
proposed rulemaking (``ANPRM'') that, among other things, sought to 
gather information about sources of influence on corporate decision-
making outside the scope of voting securities.\40\ The Commission noted 
the possibility that there are ways to gain influence over a company 
other than through the acquisition of voting rights, for instance 
through board observers, and pointed to the increasing use of board 
observers as part of the governance structure. Because the acquisition 
of rights to be a board observer is not a reportable event under the 
HSR Act, the Commission sought information about whether having rights 
as a board observer provides opportunities to influence an issuer's 
business decisions.\41\
---------------------------------------------------------------------------

    \40\ 85 FR 77042 (Dec. 1, 2020).
    \41\ ``At the very least, board observers gain insight into an 
issuer's strategic decision-making, which is not only useful to the 
investor sponsoring the board observer, but may also be useful to 
competitors in the market, especially when those board observers 
also serve as officers or directors of a competitor. Companies 
likely benefit from interacting with board observers because company 
management can obtain additional investor insight without having to 
alter the composition or voting balance on the board.'' Id. at 
77050.
---------------------------------------------------------------------------

    The Commission received two comments in response to the ANPRM that 
discuss the role of board observers, and each comment indicated that 
individuals serving as board observers typically receive the same 
information as the board of directors, although there may be ways to 
exclude them from reviewing privileged or competitively sensitive 
information.\42\ In the Commission's experience, board observers have 
become more prevalent and could be privy to the same information as 
members of the board. For that reason, information about who these 
individuals are and whether they also serve as officers, directors, or 
board observers with other companies is important for understanding 
other sources of influence on the company's competitive decision-making 
and whether such individuals could share information between 
competitors. The Commission believes that having this information 
available during the initial waiting period would permit the Agencies 
to take steps to minimize the sharing of information prior to 
consummation.
---------------------------------------------------------------------------

    \42\ See Am. Bar. Ass'n, Comment on Hart-Scott-Rodino Coverage, 
Exemption, and Transmittal Rules ANPRM, 10-11 (Feb. 1, 2021), 
https://www.regulations.gov/comment/FTC-2020-0086-0015; Comput. & 
Commc'n Indus. Ass'n, Comment on Hart-Scott-Rodino Coverage, 
Exemption, and Transmittal Rules ANPRM, 11 (Jan. 26, 2021), https://www.regulations.gov/comment/FTC-2020-0086-0002.
---------------------------------------------------------------------------

    The Commission thus proposes that filing persons provide 
information about the officers, directors, and board observers (or in 
the case of unincorporated entities, individuals exercising similar 
functions) of the acquired entity(s) and entities within acquiring 
person(s), as applicable, for the prior two years, and for each 
individual, identify any other companies for which those individuals 
would serve or have served during the prior two years as officers, 
directors, or board observers. The Commission also proposes requiring 
the same information for the prospective officers, directors, or board 
observers of the acquired and acquiring entities after the transaction, 
as well as for any officers, directors, or board observers of new 
entities created as a result of the transaction (and, in each case, for 
unincorporated entities, individuals serving those functions). If it 
would be impossible to identify the specific officers, directors, and 
board observers, filers should describe who would have the authority to 
choose them. Information received through these proposals would help 
the Agencies identify individuals with the ability to participate in or 
influence competitively relevant decision-making related to the filing 
persons or with access to confidential business information, allowing 
the Agencies to engage in more effective enforcement of the antitrust 
laws. The Commission believes that this information should be known to 
or readily accessible by the filing parties, and in some cases already

[[Page 42191]]

collected as part of an incorporated entity's antitrust compliance 
program.

C. Transaction Information

    The Commission proposes the creation of a Transaction Information 
section within the proposed Instructions. Currently, information about 
the transaction is required in several sections of the Form: the 
initial portion of the current Form requires information about the 
filing fee and whether early termination of the waiting period is 
requested; Item 2(a) requires identification of the ultimate parent 
entities of the acquiring and acquired persons; Item 2(b) identifies 
the type of transaction; Item 2(c) identifies the Sec.  801.1(h) 
threshold that will be crossed; Item 2(d) seeks information about the 
percentage and value of the voting securities, non-corporate interests, 
and/or assets to be required; Item 3(a) asks for identification of the 
acquiring and acquired persons and entities, as well as a description 
of the transaction; Item 3(b) requires the listing and attaching of the 
most recent transaction agreement, or letter of intent; and Item 5(b) 
requires information about joint ventures and formations. The 
Commission proposes the reorganization, clarification, and expansion of 
these items to require information that will aid the Agencies in 
understanding the totality of the transaction during the initial 
waiting period. These proposed changes, discussed below, would require 
information about the transaction to be reported in the following 
proposed categories: Parties, Filing Fee, Transaction Details, and 
Transaction Description.
1. Parties
    The proposed Parties section within the proposed Instructions would 
require the identification of the acquiring and acquired persons and 
the acquiring and acquired entities. This information is currently 
collected in Item 3(a) of the Form, and the Commission is not proposing 
any material changes to this requirement.
2. Filing Fee
    The proposed Filing Fee section within the proposed Instructions 
would require identification of the total filing fee required for the 
transaction and information about the payment, including identification 
of the paying entity and the Electronic Wire Transfer confirmation 
number.\43\ This information is currently collected in the Fee 
Information section of the Form, and the Commission is not proposing 
any material changes to this requirement.
---------------------------------------------------------------------------

    \43\ If electronic wire transfers are not available to the 
filing party, the Instructions would continue to provide 
instructions for paying by check.
---------------------------------------------------------------------------

3. Transaction Details
    The proposed Transaction Details section within the proposed 
Instructions would require the same information currently required by 
Items 2(b)-2(d) of the Form that detail whether the transaction 
involves the acquisition of voting securities, non-corporate interests 
or assets, and the approximate value of each, as well as whether a 
notification threshold is crossed. The Commission is not proposing any 
material changes to these requirements.
4. Transaction Description
    The Commission proposes creating a Transaction Description section 
within the proposed Instructions to reorganize information currently 
required in the Transaction Description portion of Item 3(a) of the 
Form, and to expand the required information, as described below.
a. Business of the Acquiring Person
    The Commission proposes requiring the acquiring person to describe 
its business operations. Currently, Item 3(a) of the Form requires 
filing persons to briefly describe the transaction, including whether 
assets, voting securities, or non-corporate interests (or some 
combination) are to be acquired. Filers must also describe the business 
operation being acquired or what the assets being acquired 
comprise.\44\ Although this information helps the Agencies understand 
what is proposed to be acquired, it does not provide any insight into 
the full range of business operations or other entities involved in the 
transaction on the part of the acquiring person. In the Commission's 
experience, understanding the scope of the acquiring person's business 
operations is critically important to determining whether the 
transaction poses any potential competition concern. Although this 
information is well known to the acquiring person, it is often not 
easily or quickly collected and confirmed from public sources during 
the initial waiting period.
---------------------------------------------------------------------------

    \44\ 81 FR 60257 (Sept. 1, 2016).
---------------------------------------------------------------------------

    As a result, the Commission proposes requiring the acquiring person 
to briefly describe the business operations of all entities within the 
acquiring person to provide a clear overview of all aspects of the 
acquiring person's pre-transaction business to facilitate the Agencies' 
antitrust review during the initial waiting period. Many businesses 
have pre-prepared descriptions of their operations for use in press 
releases, marketing materials, and investor materials. Unlike the 
requirement to describe the entities or assets to be acquired, which 
would apply to both the acquiring and acquired person, the requirement 
to describe business operations would be limited to the acquiring 
person.
b. Business of the Acquired Entity
    As noted above, Item 3(a) of the Form requires filing parties to 
briefly describe the transaction, including whether assets, voting 
securities, or non-corporate interests (or some combination) are to be 
acquired. Filing persons must also describe the business operation 
being acquired or what the assets being acquired comprise. The 
Commission is not proposing any material changes to this requirement.
c. Non-Reportable UPE(s)
    Item 2(a) of the Form currently requires the identification of any 
UPE that is not required to file, and the Commission is not proposing 
any material changes to this requirement.
d. Transaction Description
    Item 3(a) of the Form currently requires a brief description of the 
transaction. The Commission is not proposing any material changes to 
this requirement.
e. Transaction Rationale
    The Commission proposes adding a new requirement that filing 
persons provide a narrative that would identify and explain each 
strategic rationale for the transaction. As helpful as the documents 
responsive to current Items 4(c) and 4(d) of the Form can be, they do 
not always convey each filing person's cumulative views on the 
rationale(s) for the transaction. Indeed, such documents (when they are 
submitted and when they discuss rationales) often contain differing, 
and at times conflicting or mutually exclusive, statements regarding 
the transaction depending on when they were prepared or by whom. For 
example, different members of the deal team might have different 
perspectives on the potential motivations for the transaction at 
different times, and the submitted documents do not resolve the filing 
person's ultimate thinking regarding the topic. Since documents 
responsive to Items 4(c) and 4(d) do not consistently provide an 
overview of the rationale(s) for the transaction, it would be of 
immense value for the Agencies to have during the initial waiting 
period a

[[Page 42192]]

statement that discusses each the strategic rationale(s) from the 
perspective of each filing person.
    The Commission thus proposes that the acquiring and acquired person 
be required to submit a narrative describing all strategic rationales 
for the transaction, including, for example, those related to 
competition for current or known planned products or services that 
would or could compete with a current or known planned product or 
service of the other reporting person, expansion into new markets, 
hiring the sellers' employees (so-called acqui-hires), obtaining 
certain intellectual property, or integrating certain assets into new 
or existing products, services or offerings. The Commission also 
proposes that the filing person identify which documents submitted with 
the HSR Filing support the rationale(s) described in the narrative. 
This proposed requirement would help ensure that the provided narrative 
is grounded in the filers' ordinary-course documents and not mere 
advocacy designed to portray a favorable view of the transaction. 
Moreover, any cited documents that support the narrative would also 
provide additional context for the Agencies as they assess the parties' 
stated rationale(s) in relation to any potential competitive 
consequences of the transaction. Understanding the business reason(s) 
for pursuing the transaction can materially affect the course and 
direction of the Agencies' antitrust review during the initial waiting 
period.
f. Transaction Diagram
    The Commission proposes a new requirement that the filing persons 
provide a diagram of the deal structure along with a corresponding 
chart that would explain the relevant entities and individuals involved 
in the transaction. The brief narrative currently required in Item 3(a) 
of the Form does not require filers to explain all the relevant 
entities or identify steps involved in the transaction and their 
sequence. As a result, the Agencies frequently request a more detailed 
account of these steps during the initial waiting period, but these 
submissions are voluntary, not uniform in their detail, and often lack 
important aspects of the transaction that may bear on the competitive 
analysis and the determination of whether the transaction warrants in-
depth review. In the Commission's experience, particularly in the case 
of complex or multi-step transactions, diagrams are generally more 
helpful than simple narratives in conveying the relationships of the 
relevant entities and the deal structure.
    The Commission's proposal that filing persons submit a diagram of 
the deal structure along with a corresponding chart explaining the 
entities involved in the transaction would further assist the Agencies' 
conceptualization of the transaction and save considerable time in 
obtaining basic information about the entities involved and how the 
transaction would affect the operations of those entities. Such 
diagrams are often prepared by companies in the ordinary course of 
business for other purposes, such as for transaction diligence 
requirements.
g. Related Transactions
    While Item 3(a) of the current Form asks parties to indicate 
whether there are additional filings related to the transaction, filers 
sometimes overlook this requirement. The proposed Instructions would 
clarify that filing persons must identify related transactions. The 
proposed Instructions would also provide a list of common circumstances 
in which multiple filings are required to guide filing parties in their 
responses. These proposed changes would provide clarity for both filing 
persons and the Agencies.
h. Early Termination
    The proposed Early Termination section would ask whether the filing 
party requests early termination of the waiting period. This question 
is currently asked on page one of the Form, and the Commission is not 
proposing any material changes to this requirement.
5. Joint Ventures
    The proposed Joint Ventures section within the proposed 
Instructions would require information about transactions structured as 
a joint venture or formation pursuant to Sec. Sec.  801.40 or 801.50. 
This information is currently collected in Item 5(b) of the Form and 
requires information about the contributions each person will make to 
the entity, what consideration will be received, the business in which 
the new entity will engage, and an allocation of revenue to industry 
codes. As discussed in section III.A.1.b. above and III.D.3. below, the 
Commission is proposing eliminating the use of 10-digit NAPCS codes. 
Therefore, the Commission proposes also eliminating the requirement to 
identify the NAPCS codes in which the joint venture will derive 
revenue. The Commission is not proposing any other material changes to 
this requirement.
6. Agreements and Timeline
    The proposed Agreements and Timeline section within the proposed 
Instructions would require filing persons to provide a term sheet or 
draft agreement that reflects sufficient detail about the proposed 
transaction to demonstrate the transaction is more than hypothetical, 
if a definitive agreement has not been executed, as described above in 
the proposed amendments to Sec.  803.5(b) at II.C. In addition, the 
Commission proposes additional changes regarding which agreements must 
be submitted. These proposed changes, discussed below, include a 
requirement to submit the entirety of all agreements related to the 
transaction and a new requirement to submit other agreements between 
the filing persons that are not related to the transaction, as well as 
a timetable for the transaction.
a. Transaction-Specific Agreements
    The Commission proposes requiring that all transaction-specific 
agreements be submitted with HSR Filings. Currently, Item 3(b) of the 
Form requires the submission of all documents that constitute the 
agreement(s) among the acquiring person(s) and the person(s) whose 
assets, voting securities, or non-corporate interests are to be 
acquired, as well as agreements not to compete and other agreements 
between the parties. The production of schedules to agreements is not 
currently required, unless the schedules contain agreements.\45\ In the 
Commission's experience, the structure of transactions has become 
increasingly complex, often comprising not only multiple agreements 
between the filing persons but agreements with third parties. 
Understanding the entirety of the transaction, including but not 
limited to non-competition and non-solicitation agreements and other 
agreements negotiated with key employees, suppliers, or customers in 
conjunction with the transaction, is crucial to determining the 
totality of the transaction and assessing during the initial waiting 
period the transaction's potential competitive impact. Moreover, 
schedules increasingly include descriptions of key terms and 
provisions.
---------------------------------------------------------------------------

    \45\ 16 CFR 803 Appendix Notification and Report Form 
Instructions at page V.
---------------------------------------------------------------------------

    The Commission thus proposes requiring filing persons to produce 
all agreements, inclusive of schedules, exhibits, and the like, that 
relate to the transaction, regardless of whether both parties to the 
transaction are signatories. It is the Commission's understanding

[[Page 42193]]

that these documents are collected and are typically included in 
materials necessary for closing. Having a complete set of transaction-
related agreements would provide the Agencies with a more complete 
understanding of the transaction under review.
b. Other Agreements Between the Parties
    The Commission also proposes requiring filing persons to submit all 
agreements between any entity within the acquiring person and any 
entity within the acquired person in effect at the time of filing or 
within the year prior to the date of filing. Understanding the scope of 
any existing contractual relationships between the filers would 
materially assist the Agencies' review by revealing any business 
interactions or relationships that exist prior to the transaction and 
that may be affecting premerger competition. These might include 
licensing agreements, supply agreements, non-competition or non-
solicitation agreements, purchase agreements, distribution agreements, 
or franchise agreements, among others. Understanding the full extent of 
the filing parties' existing contractual relationships would allow the 
Agencies to identify those relationships that contribute to the 
premerger competitive dynamics, which is material to assessing how the 
transaction may affect post-merger competition.
c. Timeline
    The Commission also proposes that filing persons provide a 
narrative timeline of key dates and conditions for closing. Just as it 
is critical for the Agencies to understand the totality of the 
transaction during the initial waiting period, it is also critical to 
understand the timing of key milestones and the conditions to closing, 
which are often complex and not easily understood from the transaction 
documents themselves. The Agencies often cannot confirm basic deadlines 
for the transaction from the transaction documents and in those cases, 
the Agencies expend a great deal of time and effort to confirm with 
filers key dates, including the timing of pre-closing conditions, 
during the initial waiting period. Understanding deal timing is 
critical to each Agency's decisions regarding how to manage its merger 
workload on a priority basis, focusing available resources on those 
deals whose closing dates are imminent. This basic information about 
the timing of the transaction is not adequately captured in the current 
Form, and, to the extent the filing person knows at the time of the HSR 
Filing and can readily provide it, this information would help the 
Agencies understand key deal milestones and better manage the timing 
and focus of the investigation during the initial waiting period.

D. Competition and Overlaps

    The Commission proposes creating a Competition and Overlaps section 
within the proposed Instructions. This section would collect, in one 
place, information that reveals any existing business relationships 
between the filing persons that requires the Agencies to take a closer 
look to determine whether the transaction warrants an in-depth 
investigation, which is the primary purpose of premerger notification 
and review. Information collected in this section would include 
information and documents currently collected in several parts of the 
Form: in Items 4(c) and 4(d), which require the production of certain 
documents created in conjunction with the evaluation of the 
transaction; Item 5(a), which requires the allocation of revenue from 
U.S. operations to industry and product codes; Item 6(c), which 
identifies certain minority-held entities of the filer; Item 7, which 
provides information about industries in which the acquiring person and 
acquired entity both participate; and Item 8, which requires the 
identification of certain prior acquisitions made by the acquiring 
person. The Commission proposes expanding and reorganizing the 
information and requiring additional documents that would bear directly 
on the premerger competitive relationship between the filing persons. 
The proposed Competition and Overlaps section would provide a new 
source of relevant information related to horizontal overlaps, as well 
as new information about supply relationships and employees, which 
would enable to Agencies to quickly identify and assess the potential 
impact of the transaction across many dimensions of competition. These 
proposed changes, discussed below, would be organized in the following 
proposed categories: Business Documents, Competition Analysis, NAICS 
Codes, Controlled-Entity Overlaps, Minority-Held Entity Overlaps, and 
Prior Acquisitions.
1. Business Documents
    The proposed Business Documents section within the proposed 
Instructions would require the submission of documents currently 
required by Items 4(c) and 4(d) of the Form and additional categories 
of documents. The Commission's proposal for requiring additional 
documents is informed by a comparison of documents submitted by filing 
persons with the HSR Filing and those submitted during the Agencies' 
in-depth investigations that are not required by the current Form but 
would have been highly probative to the initial antitrust assessment of 
the transaction during the initial waiting period. The specific types 
of proposed business documents are discussed below.
a. Transaction-Related Documents
    The proposed Transaction-Related Documents section would comprise 
the same types of documents currently required by Item 4(c) of the 
Form, which the Commission proposes to expand to include documents 
prepared by or for the supervisory deal team leads, and Item 4(d), 
which the Commission proposes to clarify without material changes. The 
Commission also proposes requiring the submission of certain previous 
draft versions of these documents.
i. Documents Prepared by or for Officers, Directors, or Supervisory 
Deal Team Lead(s)
    In the proposed Documents Prepared by or for Officers, Directors, 
or the Supervisory Deal Team Lead section, the Commission proposes 
expanding the scope of requested documents evaluating the transaction 
by adding a requirement to submit such documents prepared by or for the 
supervisory deal team lead(s). Currently, Item 4(c) requires filing 
persons to provide all studies, surveys, reports, plans, and analyses 
prepared by or for officers or directors to evaluate the acquisition 
with respect to market shares, competition, competitors, markets, 
potential for sales growth, or expansion into products or geographic 
markets. These transaction-specific assessments of competition, past 
and future, provide the Agencies with invaluable insights into each 
party's view of how the transaction could change the competitive 
landscape and, most importantly, narrow the inquiry to particular 
markets and companies that each party believes to be its competitors. 
Since the beginning of the premerger notification program, 4(c) 
documents have been a key screening tool for the Agencies to identify 
those transactions that require more than a cursory review during the 
initial waiting period. The proposed section would retain the same 
definition of transaction-related documents to be submitted but add the 
supervisory deal team lead(s) to the list of individuals to whom this 
item would apply.
    In some companies, an officer may lead the day-to-day activities of 
the deal team and would be considered the supervisory deal team lead, 
resulting in

[[Page 42194]]

no change to the documents currently required as part of Item 4(c) of 
the Form. But someone other than an officer or director often 
functionally leads the deal team. In the Commission's experience, in 
those cases, responses to current Item 4(c) often do not contain 
documents with sufficient information about the filing person's 
analysis of the competitive implications of the transaction to enable 
the Agencies to identify potentially problematic transactions. In fact, 
based on documents submitted in response to Second Requests, it is the 
Agencies' experience that individuals other than officers and directors 
are often the authors or recipients of documents that are otherwise 
responsive to Item 4(c) of the Form but are not required to be 
submitted with the HSR Filing because they were not prepared by or for 
an officer or director. These documents, typically in the possession of 
the supervisory deal team lead(s), often include information that would 
have been crucial to the Agencies' analysis of the transaction during 
the initial waiting period.
    The Commission thus proposes that in addition to requiring 
documents prepared by or for officer and directors, filing persons must 
also submit these transaction-related documents prepared by or for 
supervisory deal team lead(s). Identification of any supervisory deal 
team lead would not be based upon title alone. The Commission proposes 
that the filing person determine the individual or individuals who 
functionally lead or coordinate the day-to-day process for the 
transaction at issue. A supervisory deal team lead need not have 
ultimate decision-making authority but would have responsibility for 
preparing or supervising the assessment of the transaction and be 
involved in communicating with the individuals, such as officers or 
directors, that have the authority to authorize the transaction. Any 
such individual(s) might be the leader(s) of an investment committee, 
tasked with heading the analysis of mergers and acquisitions, or 
otherwise given supervisory capacity over the flow of information and 
documents related to transaction.
    The Commission believes this proposal strikes a balance between the 
interests of the Agencies and those of filing persons in requesting 
additional documents responsive to Item 4(c) of the Form. Requiring 
filing persons to include materials prepared by and for supervisory 
deal team lead(s) would allow the Agencies to receive additional key 
materials relevant to the analysis of the transaction without requiring 
information from all deal team members, in light of the opportunity to 
obtain additional documents through the issuance of Second Requests.
ii. Confidential Information Memoranda
    The proposed Confidential Information Memoranda section would 
collect the information currently required by Item 4(d)(i) of the Form. 
The Commission is not proposing any material changes to this 
requirement.
iii. Studies, Surveys, Analyses, and Reports
    The proposed Studies, Surveys, Analyses, and Reports section would 
collect the information currently required by Item 4(d)(ii) of the 
Form. The Commission is not proposing any material changes to this 
requirement.
iv. Synergies and Efficiencies
    The proposed Synergies and Efficiencies section would collect the 
information currently required by Item 4(d)(iii) of the Form, and the 
Commission proposes to clarify that forward-looking analyses are 
responsive. Currently, Item 4(d)(iii) asks for all studies, surveys, 
analyses, and reports evaluating or analyzing synergies, and/or 
efficiencies prepared by or for any officer(s) or director(s) (or, in 
the case of unincorporated entities, individuals exercising similar 
functions) for the purpose of evaluating or analyzing the acquisition. 
The Commission proposes to specifically include a reference to models 
and financial projections to make clear that filers should submit 
forward-looking assessments of synergies or efficiencies. This 
information is especially important for screening the competitive 
impact of products or services not yet generating revenue but projected 
to do so. As before, financial models without stated assumptions would 
not need to be provided. For many transactions, especially those 
involving markets in which competition occurs via on-going innovative 
efforts, these forward-looking assessments will materially benefit the 
Agencies' identification of transactions that warrant in-depth review.
v. Drafts
    Along with expanding the required Transaction-Related Documents as 
described above, the Commission also proposes requiring the submission 
of drafts responsive to these requests. It has been a long-standing 
position of the Commission's PNO that the submission of draft versions 
of documents responsive to Item 4(c) or 4(d) is not required unless 
there is no final version, in which case the most recent draft has been 
required, or unless a draft was sent to the board of directors. Under 
this guidance, if a draft version of a document is sent to the Board, 
it ceases to be a ``draft'' and must be submitted, even if a final 
version is also submitted. As a result, the Commission has not 
typically received many draft documents as part of HSR filings.
    The Agencies routinely ask for and receive draft documents in 
response to Second Requests and, in the Agencies' experience, these 
drafts often reveal additional information about the transaction that 
would have been important to the Agencies' review during the initial 
waiting period, such as references to specific product markets or 
competitors that were removed in subsequent versions. In addition, 
these drafts can contain highly relevant, probative, or candid 
statements about the competitive impact not reflected in the final 
version of the document. In some cases, it appears that the draft 
documents have been edited to remove candid assessments of factors 
relevant to competition prior to circulation to officers or directors. 
In others, the dates of the documents suggest that otherwise responsive 
drafts were not finalized or shared with officers or directors until 
after making an HSR Filing.
    The Commission therefore proposes clarifying in the Instructions 
that drafts of responsive transaction-related documents must be 
submitted if that document was provided to an officer, director, or 
supervisory deal team lead(s). This proposed change would ensure that 
the Agencies have access to documents that reflect pre-transaction 
assessments of business realities, as opposed to ``sanitized'' 
versions, to aid in their analysis during the initial waiting period. 
The addition of the supervisory deal team leader(s) to this requirement 
should capture draft materials important to managing the transaction 
but avoid the burden of having to submit prior versions that were not 
reviewed by senior managers or decision-makers. As stated elsewhere in 
this NPRM, the Commission aims to strike a balance between the 
Agencies' need to obtain material information about the transaction and 
the burden on filing parties, so the scope of this request is limited 
so as not to require filing parties to search numerous company 
personnel beyond officers, directors, and supervisory deal team 
lead(s).
    The Commission recognizes that requiring draft transaction-related 
documents creates an additional burden for filing parties to collect 
and submit more documents to the Commission with their HSR filings and 
that, to some

[[Page 42195]]

degree, previous versions of submitted documents may contain repetitive 
information. Moreover, HSR filings that contain large document 
submissions could overwhelm the Agencies and undermine the goal of 
effective and efficient screening for transactions that require an in-
depth investigation. For this reason, the Commission seeks comment on a 
potential alternate approach in which filing parties collect draft 
Transaction-Related Documents as part of preparing HSR filings but do 
not submit these documents until and unless agency staff reviewing the 
transaction requests the draft documents during the initial waiting 
period. In the event that agency staff requests the draft documents, 
the filing person would be required to submit them within 48 hours in 
order to retain the initial waiting period. The Commission invites 
comment on whether this alternative approach would reduce the burden 
for the parties and the Agencies compared with submitting all versions 
with the HSR Filing as described above, whether there are logistical 
issues with providing the collected draft documents within 48 hours, 
and the estimated volume of drafts collected.
b. Periodic Plans and Reports
    The proposed Periodic Plans and Reports section would require 
filing persons to submit certain high-level strategic business 
documents that were not created in contemplation of the transaction but 
still contain information relevant to the antitrust analysis. As a 
result of decades of experience, the Agencies are aware that, as part 
of diligence for a potential transaction, companies often collect a 
targeted set of ordinary course documents that do not need to be 
submitted as part of an HSR Filing. Such documents typically include 
strategic plans and documents that are useful to those negotiating or 
evaluating the transaction because they discuss general market 
dynamics, competitors, or other potential mergers and acquisitions. The 
Commission understands that these documents are collected to provide 
key transaction decision-makers with the company's internal assessment 
of commercial realities of the premerger marketplace.
    The Commission therefore proposes requiring certain plans and 
reports created in the ordinary course of business and not prepared 
solely for the purpose of evaluating the proposed transaction to be 
submitted as part of the HSR Filing. Periodic plans and reports created 
in the ordinary course of a company's business often contain detailed 
assessments of core business segments, markets, competitors, other 
acquisition targets, and projections about future competitive 
dynamics--insights that have direct bearing on the Agencies' antitrust 
assessment of the transaction in the initial waiting period. The 
Commission proposes requiring the submission of semi-annual and 
quarterly plans and reports that discuss market shares, competition, 
competitors, or markets of any product or service that is provided by 
both the acquiring person and acquired entity, if those documents were 
shared with a chief executive of an entity involved in the transaction, 
or with certain individuals who report directly to a chief executive. 
The Commission also proposes requiring the submission of all plans and 
reports submitted to the board of directors (or, in the case of 
unincorporated entities, individuals exercising those functions) that 
discuss market shares, competition, competitors, or markets of any 
product or service that is provided by both the acquiring person and 
acquired entity.
    These proposed new document requirements would be limited in 
certain specific ways to minimize the overall number of documents 
submitted with the HSR Filing. First, the new Periodic Plans and 
Reports section would not require documents that analyze ``the 
potential for sales growth or expansion into product or geographic 
markets'' as is required by current Item 4(c). Additionally documents 
responsive to this item would be limited to those prepared or modified 
within one year of the date of the HSR Filing. The Commission believes 
that the submission of a limited set of ordinary course business 
documents that were not prepared specifically to evaluate the 
transaction but discuss premerger and future competitive dynamics and 
strategies broadly would provide valuable insight and context for the 
transaction-related documents submitted with the HSR Filing. These 
ordinary course business documents are routinely submitted during in-
depth investigations in response to Second Requests and routinely 
contain unique information about the state of premerger competition, 
which if available during the initial review period would help the 
Agencies determine if an in-depth review is warranted and if so, its 
proper scope.
    The Commission is aware that this new requirement has the potential 
to result in the submission of a large number of documents for complex 
or large transactions. The Commission is also aware of the potential 
impact on the filing persons and on the Agencies of large document 
submissions. The Commission seeks to balance these interests and 
invites comment on how or whether narrowing the set of custodians for 
periodic reports and plans, or any other proposed limits, would still 
generate information about the premerger state of competition that is 
not specific to the transaction while reducing any burden on filers and 
the Agencies.
    Finally, the Commission notes that filing persons should not 
exchange additional information with respect to planned products or 
services to provide a response to this proposed requirement but should 
respond instead on the basis of regular diligence and the knowledge or 
belief of the filing person. The Commission recognizes that an acquired 
person would have limited information about the acquiring person's 
operations, including products under development, and the Commission 
does not intend these proposed changes to encourage additional 
information sharing of this type of information.
c. Organizational Chart of Authors
    As the final part of its proposed Business Documents section, the 
Commission proposes requiring filing persons to identify the authors of 
all responsive documents submitted with the HSR Filing and to provide 
additional information about each individual. Given the short period of 
time for review during the initial waiting period, it is crucial for 
the Agencies to have a clear understanding of how authors of key 
documents fit into the organization or entities of each filing person 
to determine the importance and perspective of the responsive documents 
submitted with the HSR Filing and to identify key employees within the 
organizations. Thus, the Commission proposes requiring an 
organizational chart(s) that would reflect the position(s) within the 
filing person's organization held by identified authors, and for 
privileged documents, the recipients of each document submitted with 
the HSR Filing. The Commission also proposes requiring the filer to 
identify the individuals searched for responsive documents. It would be 
sufficient to indicate by notation on the organization chart(s) which 
individuals were searched.
    Providing a chart will help contextualize reporting relationships, 
as well as the relative seniority, of the authors and recipients and 
allow the Agencies to more quickly assess which documents contain high-
level assessments from key employees. The benefit of being able to 
identify important decision-makers within the filing person and having 
context for key documents would allow the Agencies to

[[Page 42196]]

quickly assess the probative value of the documents
2. Competition Analysis
    The Commission proposes creating a new Competition Analysis section 
within the proposed Instructions. This proposed section would create 
new requirements for filing persons to provide narratives that would, 
among other things, describe their basic business lines and provide 
product or service information for all related entities; identify 
current and potential future horizontal overlaps and supply 
relationships between the filing persons; and provide information about 
their employees and what services these employees provide. These 
proposed narrative requests would provide the Agencies with crucial 
information about current and future competitive relationships between 
the filing parties, including whether they compete to hire employees, 
which is information that is not required by the current Form.
a. Horizontal Overlap Narrative
    The Commission proposes creating a new Horizontal Overlap Narrative 
section that would require each filing person to provide an overview of 
its principal categories of products and services (current and planned) 
as well as information on whether it currently competes with the other 
filing person. Such information is core to the Agencies' substantive 
antitrust analysis during the initial waiting period and is not readily 
accessible from sources other than the filers themselves. In drafting 
the Horizontal Overlap Narrative, each filing person would describe its 
current and planned principal categories of products and services in 
the way that those business lines are referred to in the company's day-
to-day operations so that the Agencies could more readily understand 
the information in the context of current market realities. If any of 
the submitted documents support the information contained in the 
narrative, the filing person would also identify such documents.
    The products or services offered by the filing persons that 
currently or potentially compete with each other are often referred to 
by antitrust professionals as ``horizontal overlaps.'' The 
identification and assessment of such horizontal overlaps is an 
essential starting point for the Agencies' substantive review of any 
transaction to determine whether it has the potential to violate the 
antitrust laws. As discussed elsewhere, NAICS code reporting can result 
in underreporting of horizontal overlaps, and not every HSR Filing 
contains 4(c) documents that could potentially reveal overlaps not 
identified by NAICS code reporting. In such cases, the HSR Filing does 
not contain basic screening information that the Agencies need to 
determine whether the transaction merits closer scrutiny during the 
initial waiting period. Premerger notification is intended to allow the 
Agencies to scrutinize any transaction that eliminates competition 
between existing or potential competitors, and it is important for 
every HSR Filing to identify any existing or potential horizontal 
overlap created by the transaction.
    As a result, the Commission proposes that within the Horizontal 
Overlap Narrative, each filing person would be required to list each 
current or known planned product or service that competes with (or 
could compete with) a current or known planned product of the other 
filer. For each such overlapping product or service, the filing person 
would provide sales, customer information (including contacts), a 
description of any licensing arrangements, and any non-compete or non-
solicitation agreements applicable to employees or business units 
related to the product or service.
    The proposed requirement for this information about each filing 
person's market presence in overlapping products or services would 
enable the Agencies to quickly identify and assess the significance of 
the filers' respective businesses both in relative and absolute terms. 
Proposed customer information would enable the Agencies to understand 
the customer base of the overlapping businesses and to promptly 
conduct, at the beginning of the initial waiting period, further 
industry research with customers likely to be affected by the 
transaction or those who are particularly knowledgeable about the 
parties' business operations, relevant industry dynamics, and other 
market participants. Contacting customers to confirm basic market 
dynamics is a key step in the antitrust analysis conducted by Agency 
staff during the initial waiting period, and the parties are frequently 
asked to provide this information on a voluntary basis once one Agency 
has granted clearance to the other to conduct an initial investigation 
of the transaction. However, since this information is not compulsory, 
the Agencies do not always receive it in a timely fashion during the 
initial waiting period, hampering the ability of the Agencies to use 
that period to effectively screen for transactions that merit the 
issuance of Second Requests.
    The proposed requirement to describe any licensing, non-compete, or 
non-solicitation agreements involving the overlapping products or 
services would enable the Agencies to assess specific categories of 
existing contracts that are likely to affect how the transaction will 
impact competition for those products or services. These existing 
relationships bear on premerger market conditions and may reflect that 
the filers already view themselves as competitors (in the case of non-
compete or non-solicitation agreements) or as key trading partners (in 
the case of licensing agreements).
    The Commission acknowledges the burden drafting the proposed 
Horizontal Overlap Narrative could create for some filers, especially 
for transactions involving close competitors with multiple overlapping 
product or service lines. But identifying those transactions that 
present broad and complex competition issues is a critical first step 
for the Agencies. Once identified, the Agencies must then properly 
manage their review, first determining which markets could be impacted 
by the transaction and then deciding which of those necessitate in-
depth review. On balance, this proposed requirement would significantly 
improve the information available to the Agencies to identify any 
existing or potential horizontal overlap to assess the competitive 
implications of a transaction during the initial waiting period. The 
Commission notes that in the Agencies' experience, companies who are 
horizontal competitors prior to the transaction frequently assess the 
antitrust risk associated with the transaction prior to making an HSR 
Filing, and therefore the information required by this proposal may 
already be available, in whole or part, to include with the HSR Filing. 
Although the Agencies have not previously required this type of 
narrative to be submitted as part of the Form, other jurisdictions have 
required such narratives for many years.
b. Supply Relationships Narrative
    The Commission proposes creating a Supply Relationships Narrative 
section that would require each filing person to provide information 
about existing or potential vertical, or supply, relationships between 
the filing persons. A prior version of the Form required similar 
information about vertical vendor-vendee relationships, but the 
requirement was eliminated in 2001 because the type of information 
collected did not prove useful enough to the Agencies as a screen for 
potential non-horizontal relationships to justify

[[Page 42197]]

the burden of providing it at that time.\46\ Based on the Agencies' 
experience investigating vertical mergers in the intervening decades, 
the Commission believes that the current proposal would provide 
sufficiently robust information to allow the Agencies to identify 
vertical and other non-horizontal issues, including those presented by 
diagonal mergers. Non-horizontal relationships can be hard to detect in 
certain sectors where supply chains are not well defined, for instance 
in the provision of services rather than physical products. The 
Agencies have an interest in knowing whether a transaction in which the 
filing persons operate in related markets would result in any change in 
market structure or incentives that might affect post-merger 
competition. Early identification of potential non-horizontal 
competitive issues is critical to determining whether further 
investigation is needed, as structural changes in these relationships 
require additional fact development to determine the nature and scope 
of potential non-horizontal competitive concerns, which can often be 
complex and unique. These issues are difficult to discern from the 
information currently required by the Form, and filing parties are in a 
unique position to identify existing or future non-horizontal business 
relationships between them.
---------------------------------------------------------------------------

    \46\ The Form originally required information about any vendor-
vendee relationship between the reporting parties regarding 
manufactured product during the most recent year; this information 
was intended to help the Agencies identify supply relationships that 
could give rise to concerns about foreclosure or other competitive 
consequences of vertical integration. The Commission eliminated this 
requirement in 2001 because it was not effective in identifying 
vertical issues, not because vertical acquisitions present no 
potential competitive risks. 66 FR 8680, 8686-87 (Feb. 1, 2001). 
Since 2001, the Form has not collected specific information related 
to vertical relationships.
---------------------------------------------------------------------------

    The Commission thus proposes to collect, in a narrative response, 
information for related sales and purchases between the filing persons 
or with other companies that use the filing person's products, 
services, or assets to compete with the other filing person. Filing 
persons would report sales to the other filing person and to any other 
business that, to the best of the filing person's knowledge, uses its 
product, service, or asset as an input for a product or service that 
competes or is intended to compete with the other filing person's 
products or services. Filing persons would also provide information 
(including contact information and a description of the supply 
agreement) for other customers that use the product, service, or asset 
to compete with other filing person. Filing persons would provide 
similar information for purchases made from the other filing person and 
from any other business that, to the best of the filing person's 
knowledge, competes with the other filing party to provide a 
substantially similar product, service, or asset. This information 
would allow the Agencies to identify whether the transaction would 
create opportunities for post-merger foreclosure of rivals arising from 
vertical or diagonal relationships.
    The Commission acknowledges that this will increase the burden on 
filers whose transaction involves existing supply relationships or who 
supply or purchase from companies that compete with the other filing 
party. But the Commission believes that requiring filing parties to 
provide a narrative that reveals existing and potential supply 
relationships between the acquiring person and acquired entity is 
important for the Agencies because it would allow them to quickly 
identify those transactions that raise concerns about non-horizontal 
competitive effects.
c. Labor Markets Information
    The Commission proposes creating a new Labor Markets section that 
would require each filing person to provide certain information about 
its workers in order to screen for potential labor market effects 
arising from the transaction. The Agencies have increasingly recognized 
the importance of evaluating the effect of mergers and acquisitions on 
labor markets and have stepped up efforts to identify and investigate 
potential labor market effects arising from reportable transactions. 
Transactions have been challenged on the basis that consummation would 
result in labor market harms,\47\ and consent agreements have included 
provisions that stop the use of certain non-compete clauses that limit 
the ability of potential market entrants to hire key employees.\48\
---------------------------------------------------------------------------

    \47\ Press Release, U.S. Dep't of Just., Justice Department Sues 
to Block Penguin Random House's Acquisition of Rival Publisher Simon 
& Schuster, (Nov. 2, 2021), https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon. See also Concurring Statement of Commissioner 
Slaughter and Chair Khan regarding FTC and State of Rhode Island v. 
Lifespan Corporation and Care New England, at 1-2 (Feb. 17, 2022), 
https://www.ftc.gov/system/files/ftc_gov/pdf/public_statement_of_commr_slaughter_chair_khan_re_lifespan-cne_redacted.pdf (recommending including a count in the complaint 
that the proposed merger would have violated Section 7 of the 
Clayton Act in a relevant labor market).
    \48\ Press Release, Fed. Trade Comm'n, FTC Imposes Strict Limits 
on DaVita, Inc.'s Future Mergers Following Proposed Acquisition of 
Utah Dialysis Clinics (Oct. 25, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-imposes-strict-limits-davita-incs-future-mergers-following-proposed-acquisition-utah-dialysis.
---------------------------------------------------------------------------

    In transactions that involve two firms that purchase labor from the 
same labor market(s), the Agencies consider whether the transaction may 
substantially lessen competition for buyers of labor services. Every 
firm competes for labor in at least one labor market and, more 
commonly, in multiple labor markets. Companies that compete in the same 
product market may also compete in the same labor market. Employers, 
however, may compete in the same labor market even when they do not 
compete in the same product or input market.
    Yet the Form does not collect any information about employees that 
would allow the Agencies to conduct an initial screening for potential 
labor market effects, which has materially hampered their ability to 
protect employees from the harmful effects of mergers. To identify 
whether the filing persons compete to employ the same types of workers 
in a particular geographic area, the Commission proposes requiring 
certain information concerning each filing person's workers before the 
transaction and any plans that would affect workers post-consummation. 
This proposed section would identify potential labor market overlaps 
and allow the Agencies to engage with the filers on potential labor 
market issues during the initial waiting period.
i. Largest Employee Classifications
    The Commission proposes creating a Largest Employee Classifications 
section that would serve as a screening tool based on the SOC system, 
developed by the Bureau of Labor Statistics, which classifies workers 
into occupational categories. Labor markets have two dimensions: the 
type or features of work performed, and the location of the work. 
Because describing every relevant feature of each job would be 
burdensome for parties, the Commission proposes requiring filing 
persons to classify their workers into occupational categories based on 
the SOC system, a widely used system for reporting worker statistics. 
While SOC categories do not always provide exact comparisons, SOC codes 
would nevertheless provide the Agencies with an objective 
classification standard which can be used as an initial screen for 
potential labor market overlaps. The use of these codes as a screening 
tool is not intended to endorse their use for any other purpose, such 
as defining a relevant labor market. To implement this proposed 
screening

[[Page 42198]]

tool, the Commission proposes requiring filers to list their five 
largest categories of workers by the relevant 6-digit SOC 
classification and to provide the total number of employees for each 6-
digit code identified.
ii. Geographic Market Information for Each Overlapping Employee 
Classification
    The Commission proposes creating a Geographic Market Information 
for Each Overlapping Employee Classification section that would serve 
as a screen for the geographic component of labor markets based on the 
United States Department of Agriculture's ERS system. The ERS commuting 
zones were designed to delineate local economies based on where people 
live and work.\49\ Filers would be required to identify the top five 
largest 6-digit SOC codes in which both parties employ workers. This 
should provide enough information for the Agencies to use SOC 
classifications as an initial proxy for labor issues while balancing 
the burden on filers by limiting the request to their five largest 
categories of workers. Also, for each of the five largest SOC codes in 
which both parties employ workers, this section would require filing 
persons to list the overlapping ERS-defined commuting zone(s) from 
which the employees commute and the total number of employees within 
each commuting zone. This proposed requirement would be limited to 
overlapping geographies, expressed as commuting zones, to capture 
sufficient information to identify potential labor market concerns 
without requiring filing parties to provide a complete list of all 
commuting zones in which they have workers.
---------------------------------------------------------------------------

    \49\ See U.S. Dep't of Agric., ERS Commuting Zones and Labor 
Market Areas, https://www.ers.usda.gov/data-products/commuting-zones-and-labor-market-areas/.
---------------------------------------------------------------------------

    This information would represent a material improvement in the data 
available to the Agencies during the initial waiting period. By relying 
on existing metrics that are familiar to U.S. companies and by limiting 
the request to the top five SOC classifications, the Commission's 
intent is to minimize the burden on filers. Nonetheless, the Commission 
seeks comment on whether this information would be difficult or costly 
to collect, and any alternative means by which the Commission could 
screen HSR Filings for potential labor market overlaps, for example by 
collecting information on the number and types of workers employed at 
each of the filing person's facilities.
iii. Worker and Workplace Safety Information
    The Commission proposes creating a Worker and Workplace Safety 
Information section that would require filing persons to identify any 
penalties or findings that were issued against the acquiring person or 
acquired entity by the U.S. Department of Labor's Wage and Hour 
Division, the National Labor Relations Board, or the Occupational 
Safety and Health Administration during the five-year period before the 
filing. If a firm has a history of labor law violations, it may be 
indicative of a concentrated labor market where workers do not have the 
ability to easily find another job. The proposed five-year period 
limitation would capture the most relevant information for analysis 
during the initial waiting period while lessening the burden on filers 
to search through older files. This information is not always publicly 
available but is known to the filers and is relevant to identifying 
potential labor market effects.
3. NAICS Codes
    The Commission proposes creating a NAICS section within the 
proposed Instructions. This section proposes changes to certain 
information currently required by Item 5(a) of the Form, which now asks 
filing persons to submit information regarding dollar revenues and 
lines of commerce with respect to operations conducted within the 
United States during the most recently completed fiscal year. This 
includes products manufactured in the United States, regardless of 
where they are sold, products manufactured outside the United States 
but sold into the United States or through a U.S. entity, and products 
or services derived from U.S. operations, whether sold to a U.S. or 
foreign customer.
    The current version of Item 5 of the Form requires the reporting of 
revenue by industry and product codes developed by Census to track 
economic activity in the United States. Over the years, the Commission 
has revised Item 5 as it sought to balance the need to receive filing 
persons' revenue information with the burden on filers to provide that 
revenue information.\50\ As part of the redesign of the premerger 
notification process contemplated in this NPRM, the Agencies reviewed 
the totality of revenue information currently required in Item 5(a) to 
determine which information is especially valuable, which is due for an 
update, and which is not sufficiently reliable or needed to conduct a 
robust initial assessment of reported transactions. As a result, the 
Commission now believes that it can further revise revenue reporting 
requirements to make reported revenue information more informative for 
the Agencies and less burdensome for filing parties. The Commission 
thus proposes a substantively different approach to revenue information 
through six proposed changes. The Commission also proposes a 
ministerial change to adopt the 2022 version of the NAICS codes, which 
are the most recent released by Census. Through these proposed changes, 
the Commission would expand and clarify the industry and product codes 
that filing persons would have to report, as well as limit the 
requirements on how revenue must be reported.
---------------------------------------------------------------------------

    \50\ See 43 FR 33450, 33520 (July 31, 1978) (revenue reporting 
based upon Standard Industrial Classification codes of the U.S. 
Bureau of the Census); 66 FR 35541 (July 6, 2001) (amending the Form 
and Instructions to report revenue by North American Industry 
Classification System codes of the U.S. Bureau of the Census); 76 FR 
42471 (July 19, 2011) (elimination of the requirement to report 
``base year'' data); 84 FR 30595 (June 27, 2019) (amending the Form 
and Instructions to report manufacturing revenue by North American 
Product Classification System-based codes of the U.S. Bureau of the 
Census).
---------------------------------------------------------------------------

    First, the Commission proposes eliminating the requirement that 
filing persons provide the precise amount of revenue attributed to each 
NAICS code. The Commission intends for the proposed change to 
streamline revenue reporting for filers and result in figures that 
would be just as useful to the Agencies for identifying important 
business lines of each person. It is the Commission's understanding 
that many businesses do not maintain detailed revenue information by 
NAICS code in the ordinary course of business and generating this 
information can require great effort. In fact, even obtaining estimates 
of revenue to the nearest $100,000, as is currently required, can still 
be burdensome for filers. The Commission therefore proposes that filing 
persons would only need to estimate revenue at five levels: pre-revenue 
(for certain products and services, as described below); less than $10 
million; between $10 million and $100 million; between $100 million and 
$1 billion; and more than $1 billion. The Commission anticipates these 
ranges would provide the Agencies with an important overview of the 
magnitude of revenue generated by particular products and services, an 
important factor in the analysis of transactions during the initial 
waiting period, while at the same time reducing the burden of reporting 
revenues for filers. The Commission welcomes comments on

[[Page 42199]]

the proposed ranges, as well as other potential ways to capture the 
relative magnitude of the business of the acquiring person or acquired 
entity attributable to each NAICS code.
    Second, the Commission proposes that NAICS codes be reported on a 
descriptive basis, encompassing all U.S. operations. Revenue reporting 
in Item 5(a) currently relies on the filing persons' ordinary course 
financial records. In the Commission's experience, reliance on these 
financial records often results in under-reporting or reporting in 
codes that may not actually be descriptive of the products or services 
provided. To address this issue, the Commission proposes requiring 
individuals familiar with the business operations of each operating 
company (or subdivision) to review the available NAICS codes to select 
the codes that would best describe the full line of products and 
services related to U.S. operations, regardless of whether the company 
tracks revenue by such codes in the ordinary course of business or 
relies on them for other reporting requirements. The Commission intends 
for this change to shift the collection of NAICS codes from how a 
company records revenue to align more closely with the full range of 
products and services offered. Because the Commission proposes to 
eliminate the requirement to specifically quantify the amount of 
revenue attributable to the codes, as described above, the Commission 
does not anticipate that this change will substantially increase the 
burden of collecting the information. Further, codes related to non-
manufacturing activities estimated to have generated less than $1 
million in the last fiscal year would not need to be listed, unless 
they overlap with a code reported by the other filing person.
    Additionally, the Commission recognizes that some NAICS codes are 
imprecise, which can result in two filing persons engaged in similar 
businesses using different NAICS codes. Therefore, the Commission 
proposes that if more than one code might be appropriate, the filing 
persons would be required to list all the codes that describe the 
products or services offered and use end notes as needed to clarify 
selections and any potential overlap where the same revenues are 
reported in more than one NAICS code. This would assist the Agencies in 
understanding the businesses of the filing persons during the initial 
waiting period and address some of the shortcomings of NAICS code 
reporting.
    Third, the Commission proposes changing how NAICS codes should be 
organized. Currently, filing persons must aggregate revenue across all 
entities within the acquiring person or acquired entity. But often the 
acquiring person or acquired entity comprises multiple operating 
companies or units, which may be engaged in multiple lines of business. 
For example, large companies can contain multiple operating units or 
subsidiaries that do business under separate brands and offer diverse 
products or services. Similarly, funds that file as acquiring persons 
may control many different operating companies. The Commission thus 
proposes to require acquiring persons and acquired entities with more 
than one operating company or unit to identify which entity(s) derives 
revenue in each code. This proposed requirement would facilitate 
efficient review and quickly identify the operating company(s) that may 
or may not be relevant to the antitrust analysis. From this 
information, the Agencies could quickly identify which entity within 
the filing person has competing or related business activities with the 
other filing party.
    Fourth, the Commission proposes requiring the reporting of certain 
NAICS codes for certain pipeline or pre-revenue products. Currently, 
filers are not required to provide information about products or 
services that did not derive revenue in the last fiscal year. Yet these 
pre-revenue or early revenue activities are often core to the 
transaction rationale and essential to understanding the potential 
competitive impact of the transaction during the initial waiting 
period. This information is known to the filing person and is not 
available from other sources, as it is typically highly sensitive. As a 
result, the Commission proposes adding a requirement for acquiring and 
acquired persons to report NAICS codes for certain pipeline or pre-
revenue products. The acquiring person would be required to identify 
any NAICS codes for products and services under development if those 
codes would overlap with the codes for current or known pipeline 
products or services of the acquired entity(s). The acquired person 
would identify the NAICS codes that would apply to the products or 
services of the acquired entity(s) that are under development or pre-
revenue and anticipated to have annual revenue totaling more than $1 
million within the following two years. The Commission believes the 
benefit to the Agencies would be substantial and anticipates that the 
burden associated with the collection of these codes would be minimal, 
as identification of these products and services would likely be 
completed during ordinary diligence. The Commission understands that 
the acquired person may have limited knowledge about the planned or 
under-development products of the acquiring person and does not intend 
the filing persons to divulge this information for the purpose of 
making an HSR Filing.
    Fifth, the proposed NAICS code section would clarify that the 
acquired person must report the NAICS codes relevant to the acquired 
entity(s) at the time of closing. While most filers currently report in 
this manner, others have asserted that when an acquired entity is 
merely a shell at the time of the HSR Filing due to anticipated pre-
consummation reorganization, no NAICS codes are required. This is not 
the intent of the revenue reporting requirements in the current Form, 
and the Commission proposes clarifying this issue by requiring NAICS 
reporting that reflects the operations of the acquired entity(s) upon 
consummation. This would provide clarity and make NAICS code reporting 
more reliable for both filing persons and the Agencies.
    Finally, the Commission proposes eliminating the requirement for 
filing persons engaged in manufacturing to provide revenue by NAPCS-
based codes. The requirement to allocate revenue to product codes dates 
from the promulgation of the Rules in 1978 and has been updated to 
reflect various product code formats implemented by Census over the 
years. The most recent Census industry code format is the 6-digit NAICS 
format.\51\ Initially, Census also created 10-digit NAICS-based codes 
to provide more detail about the products within the 6-digit NAICS 
industry codes, and these were adopted by the Commission for use in HSR 
Filings in 2001.\52\ In 2018, Census discontinued the use and updating 
of 10-digit NAICS-based codes in favor of 10-digit NAPCS-based codes. 
As a result, in 2019, the Commission amended the Form and Instructions 
to require use of the NAPCS-based codes for manufactured products.\53\
---------------------------------------------------------------------------

    \51\ NAICS Codes were first published in 1997 and first used in 
the HSR Form in 2001. See 66 FR 23561 (May 9, 2001).
    \52\ 66 FR 35541 (July 6, 2001).
    \53\ 84 FR 30595 (June 27, 2019).
---------------------------------------------------------------------------

    However, these new NAPCS-based codes have been less useful for the 
Agencies' analysis than the discontinued 10-digit NAICS-based codes and 
have created significant confusion for both filers and the Agencies. 
The NAICS-based system provided 6, 8, and 10-digit codes, with the 
description of the products becoming more precise as the number of

[[Page 42200]]

digits in the code increased. But the 10-digit NAPCS-based codes 
created by Census correspond to a combination of former 8-digit and 10-
digit NAICS-based manufactured product codes. As a result, some parties 
inadvertently report revenue using a NAPCS code that corresponds to an 
8-digit NAICS code. When this happens, the Agencies lack the more 
granular and descriptive nature of the NAPCS-based codes that correlate 
to the former 10-digit NAICS-based code that would allow the Agencies 
to more accurately identify mergers of companies that produce similar 
types of products. Additionally, when one filing party uses a NAPCS-
based code that corresponds to an 8-digit NAICS-based code and the 
other filing person uses a NAPCS-based code that corresponds to a 10-
digit NAICS-based code, the filing may not properly capture codes in 
which both parties report revenues. This could result in filings that 
should report revenue overlap code(s) but do not, limiting the 
Agencies' ability to rely on the codes to conduct an initial screen for 
competitive overlaps.
    Because the proposed Horizontal Overlap section of the proposed 
Instructions would require the identification of overlapping products 
or services, as discussed in III.D.2., the Commission believes that 
additional identification of products by NAPCS code would no longer be 
necessary. The elimination of NAPCS-based revenue reporting would 
lessen the burden on filers to collect and report these figures, which 
have become less useful to the Agencies as a tool for identifying 
horizontal overlaps.
4. Controlled-Entity Overlaps
    The Commission proposes creating a Controlled-Entity Overlaps 
section within the proposed Instructions. This section would continue 
to require the submission of information currently required by Item 7 
of the Form, such as the identification of certain entities within the 
filing person that derive revenue in the same NAICS codes as the other 
filing person and geographic information regarding the operations and 
sales of such entities, but the Commission proposes certain changes to 
what information would be collected and reported. As explained below, 
specific information related to entities controlled by the filing 
person is critical to the Agencies' initial antitrust review as it 
serves as the primary tool for identifying horizonal overlaps between 
the parties to the transaction and their controlled entities, 
especially for transactions involving a UPE with complex corporate 
structures and multiple entities under its control. Compared to the 
current HSR Form, this proposed section would: (i) add a requirement to 
provide the name(s) by which entities have done business within the 
last three years, (ii) require the filing person to identify the 
overlapping entity within its own person, rather than the other filing 
person, (iii) update the NAICS codes that require geographic reporting 
at the street address level, (iv) require the identification of 
locations of franchisees for certain NAICS codes, and (v) add a 
requirement to provide geolocation data.
a. NAICS Overlaps of Controlled Entities
    The Commission proposes that the new Controlled-Entity Overlaps 
section include the information currently required by Item 7(a), which 
requires the identification of the overlapping NAICS codes for the 
acquiring person (or an associate) and acquired entity, and Item 7(b), 
which requires the identification of the entities that derived revenue 
in overlapping NAICS codes within the UPE of the other filing person 
and, for the acquiring person, its associates. The Commission 
understands that filing persons often do not identify for the other 
filing person the entities that report in overlapping NAICS codes. 
Therefore, the Commission believes that it would be less of a burden 
for each filing person to only report entities within its own person 
that derive revenue in the overlapping NAICS codes. The Commission thus 
proposes requiring the acquiring person to identify the entity(s) 
within its own person that has operations in the same NAICS code as the 
acquired entity(s), and for the acquired person to identify the 
entity(s) within the acquired entity(s) that has operations in the same 
NAICS codes as the acquiring person. This proposed change would refine 
NAICS code reporting to provide the Agencies with a reliable source for 
identifying whether any entity within each filing person generates 
revenues in the same or related codes. As this information, unlike the 
current information required by Item 7(b), is known to the filing 
parties, the Commission anticipates that the burden of responding to 
this request will be diminished.
    The Commission proposes two additional changes to the current 
requirements of Item 7(b). First, the Commission proposes requiring the 
identification of ``doing business as'' or ``formerly known as'' names 
used within the last three years by entities with U.S. operations in 
overlapping NAICS codes. This information would allow the Agencies to 
more efficiently collect information about the overlapping entities in 
publicly available resources during the initial waiting period by 
connecting each entity with any name by which it is known to other 
market participants. This information is known to filers and limited to 
a three-year look back period.
    In addition, the Commission proposes that filing persons be 
required to identify the entity(s) that have U.S. operations in the 
overlapping NAICS code(s). For acquiring persons, this would include 
entities controlled by associates that have U.S. operations in a NAICS 
code in which the acquired entity(s) report. Currently some filers 
voluntarily match the overlapping NAICS codes to the entities within 
the acquiring person (or its associates) or acquired entity. In the 
Commission's experience, this information aids the Agencies in quickly 
identifying the entities within the filing person that may be relevant 
to the competitive analysis during the initial waiting period.
b. Geographic Market Information
    The Commission proposes creating a Geographic Market Information 
section to collect the information currently required by Items 7(c) and 
7(d) of the Form, which require, for each overlapping NAICS code, the 
identification of geographic markets where the entities controlled by 
the acquiring person (and its associates) and the acquired entity(s) do 
business. The Commission proposes to modify these requirements by 
updating the NAICS industries in which street-level reporting is 
required, requiring geolocation information for these addresses, and 
requiring the reporting of franchisees' locations.
    The Commission periodically reviews which NAICS codes require more 
granular street, city, and state address information and which NAICS 
codes need only be reported at the state level.\54\ Recognizing the 
burden that providing the street-level address for each location of an 
entity can require, the Commission differentiates between (1) NAICS 
industry codes that either do not tend to involve small local or 
regional markets or involve local markets but nonetheless can 
adequately be reviewed if the parties specify only the state in which 
revenue is derived, and (2) those which do tend to involve local 
markets for which knowing the areas served by each filing person is 
important to identify locations where

[[Page 42201]]

both parties compete for sales (i.e., geographic overlaps). As part of 
this proposed rulemaking, the Agencies have reviewed the list of NAICS 
industries for which such street-level information is required and have 
adjusted the list of sectors which, based on their experience, require 
more granular geographic information than state-level information. The 
Commission thus proposes updating the list of NAICS codes for which 
locations need only be identified at the state level and NAICS codes 
for which street-level information would be required.
---------------------------------------------------------------------------

    \54\ See, e.g., 75 FR 57110 (Sept. 17, 2010), adopted by 76 FR 
42471 (July 19, 2011).
---------------------------------------------------------------------------

    The Commission proposes removing the Nondepository Credit 
Intermediation NAICS codes (codes beginning with 5222) from the list of 
codes for which street-level information is required. In the Agencies' 
experience, these industries tend not to be locally focused. Therefore, 
for these codes, the Commission proposes requiring filing persons to 
list only the states within which they conduct operations, rather than 
street address as is now required. This proposal should reduce the 
burden on those filing persons who report sales in these NAICS codes.
    The Commission proposes that filers be required to provide street-
level reporting for the following additional codes (codes with 
asterisks indicate that all NAICS codes that begin with the preceding 
numbers are included).

113*** Forestry and Logging
2211** Electric Power Generation, Transmission and Distribution
2212** Natural Gas Distribution
3115** Dairy Product Manufacturing
311611 Animal (except Poultry) Slaughtering
311613 Rendering and Meat Byproduct Processing
311615 Poultry Processing
31181* Bread and Bakery Product Manufacturing
321*** Wood Product Manufacturing
32221* Paperboard Container Manufacturing
324*** Petroleum and Coal Products Manufacturing
325110 Petrochemical Manufacturing
325130 Synthetic Dye and Pigment Manufacturing
325180 Other Basic Inorganic Chemical Manufacturing
325193 Ethyl Alcohol Manufacturing
325194 Cyclic Crude, Intermediate, and Gum and Wood Chemical 
Manufacturing
325199 All Other Basic Organic Chemical Manufacturing
325211 Plastics Material and Resin Manufacturing
3271** Clay Product and Refractory Manufacturing
3272** Glass and Glass Product Manufacturing
327310 Cement Manufacturing
327390 Other Concrete Product Manufacturing
42331* Lumber, Plywood, Millwork, and Wood Panel Merchant 
Wholesalers
42333* Roofing, Siding, and Insulation Material Merchant Wholesalers
42344* Other Commercial Equipment Merchant Wholesalers
42345* Medical, Dental, and Hospital Equipment and Supplies Merchant 
Wholesalers
42346* Ophthalmic Goods Merchant Wholesalers
42349* Other Professional Equipment and Supplies Merchant 
Wholesalers
4239** Miscellaneous Durable Goods Merchant Wholesalers
4241** Paper and Paper Product Merchant Wholesalers
4242** Drugs and Druggists' Sundries Merchant Wholesalers
42441* General Line Grocery Merchant Wholesalers
42442* Packaged Frozen Food Merchant Wholesalers
42451* Grain and Field Bean Merchant Wholesalers
42452* Livestock Merchant Wholesalers
4247** Petroleum and Petroleum Products Merchant Wholesalers
4248** Beer, Wine, and Distilled Alcoholic Beverage Merchant 
Wholesalers
42491* Farm Supplies Merchant Wholesalers
42495* Paint, Varnish, and Supplies Merchant Wholesalers
44911* Furniture Retailers
493*** Warehousing and Storage
54138* Testing Laboratories and Services
54194* Veterinary Services
562*** Waste Management and Remediation Services
7132** Gambling Industries
71394* Fitness and Recreational Sports Centers

    These are codes that represent industries in which the Agencies 
often determine that competition occurs on a local or regional basis. 
For those codes that represent regional competition, the Commission 
believes that there would be few individual addresses that would need 
to be provided, and therefore the burden would not be significantly 
higher than reporting the overlaps at the state level. The Commission 
acknowledges that for those industries where competition occurs on a 
very localized level, for example where customers travel to the 
company's location to purchase goods or services, providing street-
level revenue information can be challenging. However, because 
businesses often face different competitors in each of these markets, 
the Agencies have learned that businesses often track sales at the 
local level in the ordinary course of business for these sectors. 
Knowing where within a state the filer's facilities are located is an 
important screening tool for the Agencies to quickly identify existing 
and potential geographic overlaps, and that benefit justifies requiring 
street-level reporting for these NAICS codes. Providing the Agencies 
with information to screen for geographic overlaps during the initial 
waiting period also benefits filing persons by reducing need to issue 
Second Requests to determine if there are such overlaps.
    The Commission recognizes that providing the street address of 
tens, hundreds, or, in certain cases, thousands of locations can impose 
a burden on filers. Therefore, the Agencies have reviewed the NAICS 
codes closely to identify only those codes for which the Agencies would 
most benefit from street-level information. For these transactions that 
require more than a cursory review, attempts to collect this 
information from the parties during the initial waiting period slows 
down the review and delays the decision on whether an in-depth 
investigation of the transaction is needed. Further, the Commission 
believes that such information should be available in an accessible 
manner for most businesses that have a large number of facilities. 
Nonetheless, the Commission welcomes comments that identify, with 
rationales, NAICS codes that should either be added to or deleted from 
the list of codes for which state-level information is required.
    The Commission also proposes requiring filers to report latitude 
and longitude information for street addresses so that the Agencies can 
easily and quickly use that information to populate mapping software 
and create maps to better identify possible geographic overlaps between 
the acquiring person and the acquired entity. Street addresses alone 
can be inadequate or inaccurate for isolating the exact location of 
facilities. Converting street addresses to coordinates is difficult due 
to abbreviations such as BLVD or ST, and street addresses often lack 
important information, such as South or North, or contain errors, such 
as mislabeling a Street address for an Avenue. Latitude and longitude 
information is unique, which reduces the likelihood of errors. Any 
errors in generating maps displaying the locations of the relevant 
facilities may affect screening for local markets, resulting in over- 
or under-identification of geographic overlaps. Since filing persons 
are familiar with the location of their own establishments, the 
Commission believes that they would be in best position to validate the 
accuracy of the locations through more precise latitude and longitude 
reporting.
    The Commission also proposes requiring filers to list locations 
where franchisees of the acquiring or acquired person (as appropriate) 
generate revenue

[[Page 42202]]

in overlapping NAICS codes that require street-level reporting. 
Currently, there is no information submitted with the Form that allows 
the Agencies to begin this analysis for companies that do business 
through franchisees. Yet all company locations at issue in the 
transaction that generate revenues, both directly and indirectly 
through franchisees, must be accounted for when the Agencies analyze 
the existence and extent of competition between the filing persons. 
These proposed changes would provide the Agencies with all company 
locations to begin assessing geographic overlaps during the initial 
waiting period. Because franchisors must approve the location of 
franchisee operations and get regular sales reports from those 
operations, the Commission believes filers with these relationships 
will have this information about their franchisees.
5. Minority-Held Entity Overlaps
    The Commission proposes creating a Minority-Held Entity Overlaps 
section within the proposed Instructions that would amend certain 
information that is currently required by Item 6(c) of the Form. Item 
6(c) currently requires filing persons to list all of the entities in 
which the acquiring person and associates of the acquiring person, or 
the acquired entity (as appropriate), holds a minority interest of 5% 
or more. As originally proposed by the Commission in 2010, this item 
was intended to focus on only those minority-held investments that 
provide products or services that report in the same NAICS code as the 
other filing person, but in the final version of the rule, in order to 
limit burden, the Commission permitted filers to list all minority-held 
companies rather than limiting the list to those that created a NAICS 
code overlap.\55\ However, in the Agencies' experience with information 
collected in Item 6(c), permitting parties to list all minority-held 
companies instead of only those that are in the same line of business 
or NAICS code has hindered the Agencies' ability to determine which 
entities may be relevant to the competitive analysis of the transaction 
during the initial waiting period. Unlike the filing persons, which 
have likely done diligence on the companies in which they invest, the 
Agencies have no basis to determine from the entire list of minority-
held companies which ones have competitively significant relationships 
with the other filing person as this information is not available from 
any other source.
---------------------------------------------------------------------------

    \55\ 75 FR 57110 (Sept. 17, 2010), adopted by 76 FR 42471 (July 
19, 2011).
---------------------------------------------------------------------------

    The Commission thus proposes eliminating the option to list all the 
minority-held entities of the acquiring person and its associates or 
acquired entity (as appropriate) and proposes once again to require 
identification of those that, to the filing person's knowledge or 
belief, would derive revenue in the same NAICS codes or have operations 
in the same industry as the other filing person. The Commission also 
proposes requiring filers to provide the names by which the listed 
entities do business. As noted above, the d/b/a or f/k/a names of the 
businesses are especially helpful to the Agencies in conducting 
additional research about the entities using public or third-party 
sources. These proposed changes would significantly assist the Agencies 
in determining which minority-held entities may be relevant to the 
competitive analysis of the transaction during the initial waiting 
period. In the Agencies' experience, there has been an increase in the 
number and type of companies in which the acquiring person and acquired 
entity have minority investments, and where they exist, understanding 
the business lines of these related companies can be important for 
determining any significant premerger competitive relationship between 
the filing persons that may be affected by the transaction. This is 
especially true where the important competitive relationship is not at 
the UPE level but arises from within the corporate structure or 
holdings of the filing persons. While the Commission recognizes that 
investors have more limited information regarding entities in which 
only a minority interest is held, the proposed Instructions would 
continue to permit filing persons to rely on their knowledge or belief. 
The Commission believes that filers have done some level of diligence 
to determine the business lines prior to investing in these entities, 
and should have some basis to identify overlaps.
6. Prior Acquisitions
    The Commission proposes creating a Prior Acquisitions section 
within the proposed Instructions that would include the information 
currently required by Item 8 of the Form, as well as additional 
information. At present, Item 8 requires the acquiring person to 
identify all NAICS codes in which the acquiring person derived $1 
million or more in revenue and the acquired entity(s) or assets also 
derived $1 million or more. For such codes, the acquiring person is 
required to report acquisitions made within the five years prior to 
filing that (i) resulted in control of entities that had net sales or 
total assets of greater than $10 million in the year prior to 
acquisition, or (ii) was an acquisition of assets valued at or above 
the statutory size-of-transaction threshold. The Commission proposes 
expanding the scope of prior acquisitions that would be identified and 
making the requirement applicable to the acquired entity as well.
    Information about prior acquisitions has always been important for 
the Agencies, allowing them to identify strategies to gain market share 
through acquisitions rather than internal expansion or more vigorous 
competition. Filers have been required to provide information about 
prior acquisitions from the beginning of the premerger notification 
program.\56\ This information can be especially important in sectors 
where acquisitions are typically not HSR-reportable but nonetheless can 
cause competitive harm and alter the market dynamics for the reported 
transaction.\57\ The Agencies have taken steps to address concerns 
about acquisition strategies that premerger review does not routinely 
capture. For instance, when the Commission identifies a company that 
has violated Section 7 and is engaging in a strategy of rolling up 
competitors, if it is likely that future acquisitions may not require 
an HSR Filing, the Commission may order the firm to provide prior 
notice or obtain prior approval for any future non-reportable 
acquisition.\58\
---------------------------------------------------------------------------

    \56\ 43 FR 33450, 33534 (July 31, 1978).
    \57\ See Press Release, Fed. Trade Comm'n, FTC Takes Second 
Action Against JAB Consumer Partners to Protect Pet Owners from 
Private Equity Firm's Rollup of Veterinary Services Clinics (June 
29, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-takes-second-action-against-jab-consumer-partners-protect-pet-owners-private-equity-firms-rollup-of-veterinary-services-clinics.
    \58\ See Press Release, Fed. Trade Comm'n, FTC Imposes Strict 
Limits on DaVita Inc.'s Future Mergers Following Proposed 
Acquisition of Utah Dialysis Clinics (Oct. 25, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-imposes-strict-limits-davita-incs-future-mergers-following-proposed-acquisition-utah-dialysis; Press Release, Fed. Trade Comm'n, FTC 
Orders the Divestiture of Hundreds of Retail Stores Following 7-
Eleven, Inc.'s Anticompetitive $21 Billion Acquisition of the 
Speedway Retail Fuel Chain (June 25, 2021), https://www.ftc.gov/news-events/news/press-releases/2021/06/ftc-orders-divestiture-hundreds-retail-stores-following-7-eleven-incs-anticompetitive-21-billion.
---------------------------------------------------------------------------

    As the minimum threshold for making an HSR Filing has been adjusted 
over time (in accord with changes in gross national product) \59\ from 
$50 million to its current $111 million, many acquisitions do not 
require premerger

[[Page 42203]]

notification, especially in certain sectors.\60\ A recent Commission 
study revealed that five of the largest technology companies in the 
United States completed 819 acquisitions that were not reported to the 
Agencies over a ten-year period from 2010-2019.\61\ The Commission has 
thus identified a need to know more during the initial waiting period 
about prior acquisitions that may raise concerns about the filings 
parties' acquisition or roll-up strategies.\62\
---------------------------------------------------------------------------

    \59\ Section 7A(a)(2) of the Act requires the FTC to revise 
thresholds annually based on the change in gross national product, 
in accordance with 15 U.S.C. 19(a)(5).
    \60\ See e.g., Thomas Wollmann, How to Get Away With Merger: 
Stealth Consolidation and its Real Effects on US Healthcare (Nat'l 
Bureau of Econ. Rsch., Working Paper 27274, 2021); Thomas Wollmann, 
Stealth Consolidation: Evidence from an Amendment to the Hart-Scott-
Rodino Act, 1 Am, Econ, Rev,: Insights 77, (2019).
    \61\ Fed. Trade Comm'n, Non-HSR Reported Acquisitions by Select 
Technology Platforms 10-11 (2021).
    \62\ See, e.g., Gerry Hansell, Decker Walker, and Jens 
Kengelbach, ``Lessons from Successful Serial Acquirers: Unlocking 
Acquisitive Growth,'' Boston Consulting Group (Oct. 1, 2014), 
https://www.bcg.com/publications/2014/mergers-acquisitions-unlocking-acquisitive-growth; Thomas Wollmann, Stealth 
Consolidation: Evidence from an Amendment to the Hart-Scott-Rodino 
Act, 1 Am, Econ, Rev,: Insights 77, (2019).
---------------------------------------------------------------------------

    Acquisitions of small companies can cause harm, including in 
sectors where competition occurs on a local level. When the Agencies 
determine that a firm is violating Section 7 through a pattern of 
serial acquisitions that fuels consolidation by eliminating local 
competitors, they can seek to prevent future violations but this is 
often insufficient to prevent widespread harm.\63\ A pattern of serial 
acquisitions may also affect competition among innovative firms by 
consolidating innovation efforts into the hands of market leaders or 
other firms attempting to control the pace or direction of 
innovation.\64\ A history of acquisitions in the same or related 
business lines may be especially important information where market 
boundaries are fluid and firms engage in a significant number of 
nonreportable transactions. This is potentially true of both the 
acquiring person and the acquired entity. The Agencies endeavor to 
identify such strategies \65\ but need more robust tools for 
identifying firms that are engaging in a strategy of consolidation 
through transactions that may violate Section 7.
---------------------------------------------------------------------------

    \63\ Paul J. Eliason et al., How Acquisitions Affect Firm 
Behavior and Performance: Evidence from the Dialysis Industry, 135 
Q. J. ECON. 221, 235 (2020). See Press Release, Fed. Trade Comm'n, 
FTC Imposes Strict Limits on DaVita Inc's Future Mergers Follow 
Proposed Acquisition of Utah Dialysis Clinics (Oct. 25, 2021), 
https://www.ftc.gov/news-events/news/press-releases/2021/10/ftc-imposes-strict-limits-davita-incs-future-mergers-following-proposed-acquisition-utah-dialysis. See also Martin Gaynor, Kate Ho, and 
Robert J Town, The industrial organization of health-care markets, 
J. of Econ. Literature, 53(2):235-284 (2015); Cory Capps, David 
Dranove, and Christopher Ody, ``Physician Practice Consolidation 
Driven By Small Acquisitions, So Antitrust Agencies Have Few Tools 
To Intervene,'' Health Affairs (Sept. 1, 2017), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2017.0054.
    \64\ Colleen Cunningham, Florian Ederer, and Song Ma, Killer 
Acquisitions, 129 J. of Pol. Econ., 649-702 (2021), https://ssrn.com/abstract=3241707.
    \65\ See e.g., Note by the United States, Start-ups, killer 
acquisitions and merger control, OECD DAF/COMP/WD (2020)23 (June 11, 
2020), https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2010-present-other-international-competition-fora/oecd-killer_acquisiitions_us_submission.pdf.
---------------------------------------------------------------------------

    Thus, the Commission proposes several changes to expand the 
requirements for information related to prior acquisitions beyond what 
is currently required by Item 8. First, the Commission proposes 
requiring both the acquiring person and the acquired entity to provide 
information about prior acquisitions. The purpose of collecting 
information on all prior acquisitions by both filers is to assist the 
Agencies in identifying a potential pattern of acquisitions in a 
particular industry that has contributed to a trend toward 
concentration or vertical integration that affects the competitive 
dynamics for the parties to the transaction, as well as the commercial 
realities of post-merger competition.\66\
---------------------------------------------------------------------------

    \66\ 43 FR 33534 (July 31, 1978).
---------------------------------------------------------------------------

    Second, the Commission proposes extending the time frame to report 
on prior acquisitions from five to ten years because the current five-
year requirement for prior acquisitions is often insufficient to 
meaningfully identify patterns of serial acquisitions or a trend toward 
concentration or vertical integration. In 1987, the Agencies changed 
the reporting time period from ten years to five years.\67\ At the 
time, it was thought five years reporting of past acquisitions would be 
sufficient to put the Agencies on notice of possible trends towards 
consolidation in the affected industries.\68\ But based on decades of 
experience since then, along with changes to the economy and the varied 
acquisition strategies of filing parties, the Commission believes ten 
years would once again provide for a better framework to allow the 
Agencies to engage in a more detailed consideration of how numerous 
past acquisitions, including those in related sectors, affect the 
competitive landscape of the current transaction under review.
---------------------------------------------------------------------------

    \67\ 50 FR 38742, 38768 (Sept. 24, 1985).
    \68\ Id.
---------------------------------------------------------------------------

    Third, the Commission proposes eliminating the threshold for 
listing prior acquisitions, which currently limits reporting to only 
acquisitions of entities with annual net sales or total assets greater 
than $10 million in the year prior to the acquisition. Limiting the 
reporting requirement to acquisitions of entities with annual net sales 
or total assets over $10 million may not capture acquisitions of new 
entrants or other nascent competitors that, despite not yet having 
widespread commercial success, nonetheless are poised to affect 
competition among existing firms or disrupt market dynamics. In fact, 
the Commission's technology acquisition study revealed that between 
39.3% and 47.9% of transactions were for target entities that were less 
than five years old at the time of their acquisition.\69\ Given the 
relative nascency of these acquired companies, the Commission believes 
that excluding prior acquisitions of firms that have not yet had the 
chance to gain commercial traction to achieve $10 million in net sales 
or assets does not provide a comprehensive picture of each filer's 
acquisition strategy. Learning more about the existence and patterns of 
these additional past acquisitions by both the acquiring person and the 
acquired entity, including acquisitions of companies that had not yet 
generated revenue, would help the Agencies better identify during the 
initial waiting period transactions that may, on their own or as part 
of a pattern of serial acquisitions, violate the antitrust laws.
---------------------------------------------------------------------------

    \69\ Fed. Trade Comm'n, Non-HSR Reported Acquisitions by Select 
Technology Platforms 26 (2021). Note this percentage range could 
also be different (i.e., lower or higher) as target entities in 
13.4% of the transactions did not have founding dates located in the 
three databases.
---------------------------------------------------------------------------

    Fourth, the Commission proposes treating asset transactions 
involving the prior acquisition of substantially all of the assets of a 
business in the same manner as prior acquisitions of voting securities 
or non-corporate interests. Currently, Item 8 provides separate 
thresholds for acquisitions of control of entities and acquisitions of 
assets. This distinction, however, does not recognize that some asset 
transactions functionally reflect the acquisition of substantially all 
of the assets of an entity as opposed to the acquisition of a distinct 
asset such as a manufacturing plant or an exclusive license. Thus, the 
current rule treats acquisitions of an entity or business differently 
depending on the form of the agreement. The proposed Instructions would 
continue to require that the acquisition of a distinct asset be 
reported only if the then-in-place size-of-transaction threshold was 
exceeded, but they would also require that a prior acquisition 
involving substantially all of the assets be reported in the same 
manner as prior acquisitions involving

[[Page 42204]]

voting securities or non-corporate interests.
    While the Commission expects that the expanded reporting 
requirements of past acquisitions would create additional burden for 
filing parties, the proposed Instructions would continue to limit the 
reporting to only acquisitions in industries for which the filers have 
reported horizontal overlaps, as identified by overlapping NAICS codes 
or in the filer's Horizontal Overlaps Narrative. This limitation still 
provides the Agencies with sufficient information to identify 
transactions that may further a trend toward concentration or patterns 
of acquisitions that may, alone or in combination, substantially lessen 
competition. Moreover, given the difficulties in determining the value 
of small or nascent companies, the Commission believes it would be less 
burdensome for filers to report all acquisitions rather than expend 
additional time in assessing their value in terms of net sales or 
assets. The Commission invites comment on ways to limit the burden and 
exclude de minimis acquisitions of no competitive significance while 
still capturing acquisitions of entities worth less than $10 million 
and allowing the Agencies to conduct a robust screening for acquisition 
strategies that further consolidation trends.

E. Additional Information

1. Subsidies From Foreign Entities or Governments of Concern
    As discussed in I.A. above, the 2022 Amendments direct the 
Commission, with the concurrence of the Assistant Attorney General, and 
in consultation with the Relevant Agencies, to require persons making 
an HSR Filing to disclose information about foreign subsidies from 
countries or entities that threaten U.S. strategic or economic 
interests. Along with the proposed definitions discussed above, the 
Commission proposes changes to the Instructions to implement this 
mandate from Congress.
    The Commission proposes creating a Subsidies from Foreign Entities 
or Governments of Concern section within the proposed Instructions. 
This proposed section would include three questions. The first proposed 
question would track the requirements and stated purpose of the 2022 
Amendments by requiring the acquiring and acquired person (as 
appropriate) to identify and describe certain subsidies, as defined by 
proposed Sec.  801.1(r)(2), received or that are anticipated to be 
received by any entity within its person from a foreign entity or 
government of concern, as defined by proposed Sec.  801.1(r)(1). Given 
the complexity of subsidies, the Commission proposes stating that the 
question should be answered upon the knowledge or belief of the filing 
person. This would relieve the filing person of the obligation to 
conduct a complex legal analysis. The filing person, however, must 
conduct good faith diligence.
    In proposing this question, the Commission believes it is also 
consistent with Congressional intent to create reasonable limits to the 
required information on subsidies to benefit both the Agencies and 
filing parties. The Commission's proposed two-year limitation would 
identify the subsidies most likely to affect the Agencies' competitive 
analysis of a proposed transaction because those subsidies are most 
likely to affect current or future conduct of the parties. The 
Commission believes that this practical qualifier, coupled with the use 
of an existing definition of ``subsidy,'' as discussed in I.A.2. above, 
would provide the Agencies with the most pertinent information for the 
analysis of proposed transactions, while reasonably limiting the 
information required from filing parties. The Commission seeks comment 
on the temporal limitation for subsidies, as well as whether a de 
minimis value should be set, and if so, what administrable levels might 
be appropriate.
    The Commission believes that requiring information on 
countervailing duties \70\ would be extremely useful in providing a 
complete picture of the potential impact of subsidies per Congress's 
mandate and screening for subsidies that bear on whether the 
transaction may violate the antitrust laws. Thus, the Commission's 
second proposed question would require the acquiring or acquired person 
(as appropriate) to identify any of its products produced in a country 
that is a covered nation under 42 U.S.C. 18741(a)(5)(C) that are 
subject to countervailing duties in any jurisdiction. The Commission 
would also ask the filing party to list the countervailing duty imposed 
and the jurisdiction that imposed the duty. Such information about the 
countervailing duties and relevant products would help the Agencies 
determine in their initial analysis of a transaction whether subsidies 
from foreign entities or governments of concern might affect some 
aspect of competition in the future. The Commission believes that 
information about countervailing duties imposed by the United States 
should be readily available to filers because the Department of 
Commerce issues fact sheets that contain an overview of final subsidy 
findings and are available on its ``recent case announcements'' web 
page (https://www.trade.gov/case-announcements-archives (case 
announcements for the prior year)) and on the International Trade 
Commission's website (https://legacy.trade.gov/enforcement/operations/scope/index.asp (older determinations)), and that information about 
countervailing duties imposed by other jurisdictions should be readily 
available to filing persons from similar sources as well.
---------------------------------------------------------------------------

    \70\ Countervailing duties are duties intended to offset the 
price effect of significant foreign government subsidies on a 
product or good. In the United States, the International Trade 
Administration of the Department of Commerce investigates whether 
imported products are subject to significant foreign government 
subsidies. The amount of the subsidies that the foreign producer 
receives from its government is the basis for the rate by which the 
subsidy is offset, or ``countervailed,'' through higher import 
duties enforced by U.S. Customs and Border Protection. See, e.g., 
Int'l Trade Admin., https://www.trade.gov/us-antidumping-and-countervailing-duties.
---------------------------------------------------------------------------

    The Commission's third proposed question would require the 
acquiring or acquired person (as appropriate) to identify, to its 
knowledge or belief, any of its products produced in whole or in part 
in a country that is a covered nation under 42 U.S.C. 18741(a)(5)(C) 
that are the subject of an investigation by any jurisdiction for 
potential countervailing duties. The Commission would also ask the 
filing person to list the jurisdiction conducting the investigation. 
Such information would help the Agencies identify products that may be 
subject to active subsidies and assist the Agencies in their assessment 
of the subsidies' impact on competition. It is the Commission's 
understanding, however, that the investigating agencies do not always 
inform all producers or market participants of an investigation; thus, 
the Commission proposes limiting the scope of this third question to 
the filing person's knowledge or belief. The Commission believes that 
limiting this reporting requirement to the knowledge or belief of the 
filing person would provide filers with enough flexibility to respond 
to the question and certify the HSR Filing without having to confirm 
with various relevant agencies that no such investigation exists.
    The Congressional mandate to collect information about foreign 
subsidies is consistent with the Agencies' desire to better understand 
whether there are significant ties to individuals or entities that may 
affect the Agencies' assessment of the potential competitive risks 
associated with the transaction. For instance, a foreign government or 
entity

[[Page 42205]]

could have a financial relationship that gives it the ability to sway 
the filing person to make different choices in the marketplace than it 
would without the subsidy. As discussed in III.B., Agencies would 
benefit from more complete information about individuals and entities, 
including governments, that have the ability to control or influence 
competitive decision making. The Commission believes that, taken 
together, information about minority holdings, individuals with 
influence, officers, directors, and board observers, as well as 
information about foreign subsidies may reveal significant constraints 
on the competitiveness of the affected company that should be taken 
into account during the Agencies' initial review.
2. Defense or Intelligence Contracts
    The Commission proposes creating a Defense or Intelligence 
Contracts section within the proposed Instructions that would require 
filing persons to report certain contracts with defense or intelligence 
agencies. The Agencies regularly review filings from companies that 
supply the Department of Defense (``DoD'') or the intelligence 
community (``IC'') with products or services. During the initial 
waiting period, it is important for the Agency to quickly contact DoD 
and IC staff to collect key insights and information to prevent mergers 
that may have an anticompetitive impact on taxpayers through purchases 
made through DoD and IC programs. Yet without information about 
specific DoD or IC contracts or knowledge of which unit handles that 
contract, the Agencies often face difficulty and delay in identifying 
appropriate relevant personnel or stakeholders with knowledge of the 
contracts, programs, or products or services at issue. Such delays 
hinder the identification and evaluation of competition issues that 
would impact DoD or IC programs or budget during the initial waiting 
period.
    The Commission thus proposes adding a requirement that both the 
acquiring and acquired person identify whether they have existing or 
pending defense or intelligence procurement contracts, as defined by 10 
U.S.C. 101(a)(6) and 50 U.S.C. 3033(4), valued at $10 million or more, 
and provide identifying information about the award and relevant DoD or 
IC personnel. For filings from companies that supply DoD or the IC with 
products or services, this information would greatly enhance the 
Agencies' ability to identify and contact appropriate stakeholders 
within DoD or IC to seek their input as customers that might be 
impacted by the proposed transaction. This information is well known to 
the companies that do business with these government entities.
3. Identification of Communications and Messaging Systems
    In conjunction with the proposed requirement that filing persons 
certify they have taken steps to prevent destruction of relevant 
information, as discussed in III.F. below, the Commission also proposes 
that filers identify and list all communications systems or messaging 
applications on any device used by the acquiring or acquired person (as 
appropriate) that could be used to store or transmit information or 
documents related to its business operations. Companies have 
increasingly been relying on new forms of communication--beyond email 
and other traditional document formats--to engage in business 
discussions and make key operational decisions. These systems can 
encompass internal chat technologies (such as so-called ephemeral 
messaging) or document management systems, including where content 
exchanged between the individuals is automatically deleted.
    In the Agencies' experience, these communications systems contain 
highly relevant information on the transaction itself, as well as on 
topics that are critical for the Agencies' assessment of the 
transaction such as competition, competitors, markets, customers, and 
industry characteristics. Company employees' more frequent use of these 
communications systems and messaging applications, particularly in lieu 
of other traditional forms of communication such as email, has meant 
that these systems and applications have become an important part of 
Agencies' investigations. Moreover, to the extent that these 
communications systems are being used to evade document retention and 
preservation requirements that exist for more traditional forms of 
communication, the Commission believes it is important for the parties 
to understand that their preservation and retention obligations apply 
to these systems as well. As yet, many parties do not appear to fully 
understand and/or comply with document preservation obligations for 
these new modalities. For these reasons, the Agencies would greatly 
benefit from having a complete and transparent picture of the filer's 
applicable communication systems at the filing stage. The Commission 
further believes that this information is readily available to the 
filing person and that identifying these systems in use by the company 
with the HSR Filing would impose minimal burden.
4. Other Jurisdictions
    The Commission proposes creating a new Other Jurisdictions section 
within the proposed Instructions. This section proposes to amend the 
requirements concerning antitrust filings outside of the United States 
and add a voluntary waivers section to allow for the sharing of HSR 
information with other enforcers.
a. Transactions Subject to International Antitrust Notification
    The Commission proposes creating a Transactions Subject to 
International Antitrust Notification section that would require the 
identification of other jurisdictions that may be conducting a 
competition review. Currently, page one of the Form asks filing persons 
to voluntarily identify other jurisdictions where the transaction will 
trigger premerger notification under the laws of that jurisdiction. The 
Commission first proposed collecting information about filing in other 
jurisdictions in 1994, when it proposed a mandatory requirement.\71\ In 
1999, the Commission noted that it was still considering the proposals 
included in its 1994 proposed rulemaking.\72\ The Commission then 
proposed a voluntary requirement in 2001 \73\ and the final rule was 
adopted in 2003.\74\ The Commission now proposes making the disclosure 
of international filing obligations a mandatory requirement.
---------------------------------------------------------------------------

    \71\ 59 FR 30545, 30547 (June 14, 1994).
    \72\ 64 FR 1203 (Jan. 8, 1999).
    \73\ 66 FR 8680, 8684 (Feb. 1, 2001).
    \74\ 68 FR 2425, 2429 (Jan. 17, 2003).
---------------------------------------------------------------------------

    Since 2001, and certainly since 1994, merger enforcement by other 
competition authorities has become more robust as more jurisdictions 
have adopted competition laws that impose mandatory or voluntary 
premerger notification requirements. At the same time, a larger 
percentage of HSR-reportable transactions now involve companies with 
international reach. As a result, more transactions are likely to be 
subject to review in multiple jurisdictions around the world. Even 
though the number of transactions subject to premerger notifications in 
multiple jurisdictions has increased over the years, most filers do not 
voluntarily disclose on the Form that their transactions will be 
subject to non-U.S. notification requirements.
    For many years, the Agencies have cooperated with numerous 
competition authorities on cases of common concern to help identify 
issues of common interest, gain a better understanding of relevant 
facts, and achieve, where possible, consistent or, at a minimum,

[[Page 42206]]

non-conflicting outcomes. In order to fully benefit from inter-agency 
consultations, the Agencies need to know which foreign jurisdictions 
may also be evaluating the proposed transaction as early as possible. 
The delay associated with confirming whether there will be reviews or 
investigations by other competition authorities undermines effective 
cooperation during the initial waiting period, when sharing expertise 
and knowledge with other competition enforcers would be especially 
helpful in identifying which transactions need more in-depth review. 
Moreover, review by other jurisdictions can often affect the timing, 
pace, or ability to close the transaction, especially for jurisdictions 
that also require suspension of the transaction until the competition 
review is completed.
    The Commission thus proposes a mandatory requirement to identify 
the jurisdictions where each filing person has already filed or is 
preparing notifications to be filed as well as a list of the 
jurisdictions where it has a good faith belief it will file. The 
Commission believes that upon execution of a definitive agreement, 
filers often know the jurisdictions where competition filings will be 
made. However, to account for the possibility that, at the time of the 
HSR Filing, parties may not have yet identified all the other 
jurisdictions where they will file, the proposed rule provides 
flexibility by stating that parties should respond based on their 
``good faith belief.''
b. Voluntary Waivers for International Competition Authorities and 
State Attorneys General
    The Commission proposes the creation of a voluntary waivers check 
box within an Other Jurisdictions section to allow filing persons to 
indicate that they agree to waive the confidentiality provisions of the 
Act, 15 U.S.C. 18a(h), for any jurisdiction identified by the filing 
person. As discussed above, transactions are often reviewed by non-U.S. 
competition authorities, or by one or more State Attorneys General. But 
the Act's confidentiality provision contains limits on disclosing 
material collected as part of the Agencies' HSR review of the 
transaction. As a result, merging parties and third parties waive 
statutory confidentiality protections so that the investigating Agency 
can share certain limited information with foreign or state competition 
authority counterparts, enabling the Agency to make more informed, 
consistent decisions, and investigate the transaction more effectively, 
often expediting review.\75\
---------------------------------------------------------------------------

    \75\ The Agencies have developed a model waiver of 
confidentiality for use in civil matters involving non-U.S. 
competition agencies that has been in use for 10 years. Similarly, 
the Agencies have developed a protocol for coordination in merger 
investigations with State Attorneys General. See Fed. Trade Comm'n, 
https://www.ftc.gov/policy/international/international-competition/international-waivers-confidentiality-ftc-antitrust-investigations 
and https://www.ftc.gov/advice-guidance/competition-guidance/protocol-coordination-merger-investigations.
---------------------------------------------------------------------------

    The Commission proposes amending the Instructions to allow filing 
persons to waive the confidentiality provision contained in the Act, 15 
U.S.C. 18a(h), for any non-U.S. competition authorities or State 
Attorneys General they identify. Allowing filers to waive the 
confidentiality protections in the HSR Filing would provide an 
efficient mechanism for filers to consent to limited waivers of 
confidentiality at the outset to facilitate early cooperation among 
competition enforcers. The proposed voluntary waiver would allow the 
Agencies to disclose the existence of an HSR Filing and the information 
contained in the HSR filing, but only for those ex-U.S. competition 
authorities or State Attorneys General selected by the filing person. 
The Commission also proposes modifying the language that would inform 
filers about potential disclosures based on the waivers to track the 
language of the Act more closely. The waivers would be optional for the 
parties, but the Commission expects that some filers will benefit from 
providing these limited waivers of confidentiality.

F. Certification

    The Commission proposes amending the language of the certification 
that filing persons must submit with HSR Filings to require affirmation 
that the filing person has taken the necessary steps to prevent the 
destruction of documents and information related to the transaction. 
When parties submit premerger notification filings, this triggers a 
Congressionally mandated initial phase investigation regarding the 
potential competitive effects of the proposed transaction. When making 
an HSR Filing, filers should be aware that the Agencies may, prior to 
the expiration of the initial waiting period, issue Second Requests to 
further investigate the proposed transaction.\76\ If issued, a Second 
Request requires the recipient to produce documents and information 
relevant to the transaction. If, as part of a filing person's ordinary 
course business operations, relevant information is deleted or 
destroyed during the initial waiting period, this could lead to a loss 
of information that may be critical to the investigating Agency and 
undermine its ability to conduct a full in-depth investigation pursuant 
to the Act to determine if the transaction is likely to violate Section 
7 or any other antitrust law and to seek to prevent its consummation. 
Therefore, the Commission proposes adding to the certification an 
acknowledgement that the Agencies may require the submission of 
additional information or documents in response to a Second Request and 
a confirmation that the officer, director, or other individual 
described in Sec.  803.6, as appropriate, has taken the necessary steps 
to prevent the destruction of documents and information related to the 
proposed transaction before the expiration of any waiting period. Such 
steps could include, for example, the suspension of auto-delete 
policies in place at any entity within the filing person.
---------------------------------------------------------------------------

    \76\ 15 U.S.C. 18a(e); 16 CFR 803.20.
---------------------------------------------------------------------------

    The Commission also proposes the addition of language in the 
Instructions that would serve to remind filers that there are criminal 
penalties under other federal statutes that prohibit various deceptive 
practices aimed at frustrating or impeding the legitimate functions of 
government departments or agencies. In recent years, the Agencies have 
observed an increasing number of instances where, in the course of an 
investigation or later litigation challenging the transaction, the 
filing parties disclaim or modify statements or information submitted 
as part of the Form, notwithstanding numerous federal laws that 
prescribe criminal penalties for submitting false information to the 
government, including as part of an HSR Filing. While the Commission's 
proposed language does not intend to change any existing obligation to 
comply with other laws, it would provide notice to filers that the 
Commission takes those obligations seriously and may refer filers who 
do not comply with those obligations for potential criminal 
proceedings. The Commission does not expect this proposed reminder, 
which does not require any additional information or obligation, to 
result in additional burden for filing persons.

G. Affidavit

    As discussed in the proposed changes to Sec.  803.5(b) above at 
II.C., the Commission proposes requiring filings for transactions 
without definitive agreements to include a term sheet or draft 
agreement that describes with specificity the scope of the transaction 
that would be consummated. As a result, the Commission proposes that

[[Page 42207]]

parties making such filings attest in their affidavit that a term sheet 
or draft agreement that describes with specificity the scope of the 
transaction that will be consummated has been submitted with the 
executed letter of intent or agreement in principle.

Severability

    Section 803.90 provides that, if any provision of the Rules 
(including the Form) or the application of any such provision to any 
person or circumstances is held invalid, the other provisions of the 
Rules and their application to other persons or circumstances shall be 
unaffected. This severability (or separability) provision would apply 
to any modifications of the HSR Filing requirements that the Commission 
adopts as final after issuing this NPRM and considering the public 
comments received. If a regulatory provision is severable, and one part 
of the provision is invalidated by a court, the court may allow the 
other parts of the provision to remain in effect.\77\ When analyzing 
whether a provision is severable, courts consider both (a) the agency's 
intent and (b) whether severing the invalid parts of the provision 
would impair the function of the remaining parts.\78\ The Commission is 
not proposing any changes to the separability provision in Sec.  803.90 
but is confirming its intent that, if a court were to invalidate any of 
the HSR requirements, including any modifications that the Commission 
finalizes at the end of the rulemaking proceeding, the other 
requirements would remain in effect.
---------------------------------------------------------------------------

    \77\ See, e.g., Davis Cnty. Solid Waste Mgmt. v. EPA, 108 F.3d 
1454, 1459 (D.C. Cir. 1997).
    \78\ Id. at 1460.
---------------------------------------------------------------------------

Communications by Outside Parties to Commissioners and Their Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding, from any 
outside party to any Commissioner or Commissioner's advisor, will be 
placed on the public record. See 16 CFR 1.26(b)(5).

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (``PRA''), 44 U.S.C. 3501 
et seq., federal Agencies must obtain approval from the Office of 
Management and Budget (``OMB'') for each collection of information they 
conduct or sponsor. The term ``collection of information'' means agency 
requests or requirements that members of the public submit reports, 
keep records, or provide information to a third party. 44 U.S.C. 
3502(3); 5 CFR 1320.3(c). The current rule contains various provisions 
that constitute information collection requirements as defined by 5 CFR 
1320.3(c), the definitional provision within OMB regulations 
implementing the PRA. 44 U.S.C. chapter 35. The existing information 
collection requirements in the HSR Rules and Form have been reviewed 
and approved by OMB (OMB Control No. 3084-0005). The current clearance 
expires on February 28, 2026. Because the rule amendments proposed in 
this NPRM would change existing reporting requirements, the Commission 
will submit this notice of proposed rulemaking and the associated 
Supporting Statement to OMB for review under the PRA.

Increased Time Collecting Data for and Preparing an HSR Filing

    The proposed amendments are primarily changes to the information 
reported on the Notification and Report Form and do not affect the 
reportability of a transaction. Thus, the same number of filings 
projected for fiscal year 2023 in the most recent Supporting Statement 
submitted to OMB and also appearing in the associated Federal Register 
publication \79\ will be used for these burden hour calculations.
---------------------------------------------------------------------------

    \79\ 88 FR 3413, 3414 (Jan. 19, 2023).
---------------------------------------------------------------------------

    Some of the proposed changes are intended to reduce the burden of 
filing. The Commission anticipates that the proposals to report NAICS 
codes in ranges rather than by specific dollar amount would reduce the 
burden on almost all filers. Additionally, the proposed change to 
eliminate the requirement for filers that derive revenue from 
manufacturing operations to report NAPCS code revenues is also 
anticipated to reduce the burden for those filers. Finally, the 
Commission also proposes to limit the reporting of minority investors 
of the acquired entity.
    Some of the proposed changes offer clarifications to the current 
rules and are unlikely to change the burden on filers. These include 
the proposed changes to eliminate references to paper and DVD filings 
(Sec. Sec.  803.2, 803.5, and 803.10) and to specifically discuss the 
commencement of the waiting period (Sec.  803.10).
    Certain proposed changes would require the acquiring person to 
collect and report information that the Commission believes is held in 
the acquiring person's ordinary course of business records. These 
include proposed requirements for the acquiring person to describe its 
own business(es); report minority investors in additional entities 
related to the transaction; disclose relationships with individuals or 
entities that provide credit, hold non-voting securities, have the 
right to appoint board observers, or have management agreements with 
entities related to the transaction; and to identify members of boards 
of directors. Once collected, the Commission anticipates that the 
burden associated with some of these proposals will lessen for 
subsequent filings by the same acquiring person, as the information 
would only need to be updated.
    Many of the proposed changes would increase the burden on all 
filers. These include new document collection requirements to produce 
transaction-related documents from supervisory deal team members; 
business documents that relate to competition topics but were not 
produced specifically for the transaction; drafts of responsive 
documents; other agreements between the acquiring and acquired persons, 
and to log the request to which documents are responsive. Additionally, 
the proposed requirements to provide narratives regarding transaction 
rationale, diagrams of the transaction, and organizational charts for 
custodians of documents would be applicable to all filers.
    Some of the proposed changes would significantly increase the 
burden on only certain filers. These include those filers whose 
businesses have existing horizontal, non-horizontal, or labor market 
overlaps or relationships, with the largest burden falling on filers 
whose transaction involves many such relationships; transactions that 
involve a large number of foreign language documents; filing persons or 
transactions that have a complex structure; transactions that are filed 
on letters of intent or agreements in principle; and filing persons 
that receive subsidies from foreign entities of concern.
    PNO staff canvassed current Agency staff who had previously 
prepared HSR filings while in private practice to estimate the 
projected change in burden due to the proposed amendments to the 
Instructions. All have considerable experience with the HSR rules and 
with preparing HSR Filings for the types of transactions that are most 
likely to be affected by the proposed changes.
    These experts were asked to estimate the incremental increase in 
time to prepare HSR Filings, for both the company and its outside 
counsel, taking into account that transactions range in complexity--
from relatively simple transactions with no overlaps and few

[[Page 42208]]

documents (such as ones only involving executive compensation or other 
stock purchases by an individual), to moderately complex transactions 
(such as a fund buying or selling a portfolio company with limited 
overlaps) to very complex (for example, a strategic acquisition by a 
large company that sells many overlapping products in competition with 
the seller). The ranges from canvassed officials estimated that the 
proposed changes would result in approximately 12 to 222 additional 
hours per filing, depending on the complexity of the filing at issue. 
In the past five years, approximately 45% of filings had reported 
overlaps. To estimate an average number of additional hours, the 
Commission conservatively assumes that 45% of the filings may require 
an additional 222 hours to prepare and 55% may require an additional 12 
hours to prepare. Thus, the Commission estimates an average of 107 
additional hours (rounded to the nearest hour) will be allocated to 
non-index filings.\80\ Added to the current estimate 37 hours,\81\ the 
total estimated hours would be 144 per filing.
---------------------------------------------------------------------------

    \80\ Clayton Act section 7A(c)(6) and (c)(8) exempt from the 
requirements of the premerger notification program certain 
transactions that are subject to the approval of other agencies, but 
only if copies of the information submitted to these other agencies 
are also submitted to the FTC and the Assistant Attorney General. 
Thus, parties must submit copies of these ``index'' filings, but 
completing the task requires significantly less time than non-exempt 
transactions that require ``non-index'' filings. The proposed 
changes would not require any additional information from indexed 
filings.
    \81\ 88 FR 3413, 3414 (Jan. 19, 2023).
---------------------------------------------------------------------------

Net Effect

    The proposed Rule and Notification and Report Form changes only 
affect non-index filings \82\ which, for FY 2023, the FTC projects will 
total 7,096. As described above, the Commission estimates that he 
amendments to the HSR Rules and Notification and Report Form would 
increase the time required to prepare responses for non-index filings, 
with an estimated net increase of 107 hours per filing. Thus, the total 
estimated additional hours burden is 759,272 (7,096 non-indexed filing 
x 107 hours/each).
---------------------------------------------------------------------------

    \82\ Id.
---------------------------------------------------------------------------

    Applying the revised estimated hours, 759,272, to the previous 
assumed hourly wage of $460 for executive and attorney compensation, 
yields approximately $350,000,000 in labor costs. The amendments are 
expected to impose either minimal or no additional capital or other 
non-labor costs, as businesses subject to the HSR Rules generally have 
or obtain necessary equipment for other business purposes. Staff 
believes that the above requirements necessitate ongoing, regular 
training so that covered entities stay current and have a clear 
understanding of federal mandates, but that this would be a small 
portion of and subsumed within the ordinary training that employees 
receive apart from that associated with the information collected under 
the HSR Rules and the corresponding Instructions.

Request for Comments

    The Commission invites comments on: (1) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (2) the accuracy of the agency's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (3) ways to enhance 
the quality, utility, and clarity of the information to be collected; 
and (4) ways to minimize the burden of these information collections on 
respondents.
    Comments on the proposed reporting requirements subject to PRA 
review by OMB should additionally be submitted to www.reginfo.gov/public/do/PRAMain. Find this particular information collection by 
selecting ``Currently under 30-day Review--Open for Public Comments'' 
or by using the search function. The reginfo.gov web link is a United 
States Government website produced by OMB and the General Services 
Administration (GSA). Under PRA requirements, OMB's Office of 
Information and Regulatory Affairs (OIRA) reviews Federal information 
collections.

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that the 
agency conduct an initial and final regulatory analysis of the 
anticipated economic impact of the proposed amendments on small 
entities, except where the Commission certifies that the regulatory 
action will not have a significant economic impact on a substantial 
number of small entities. 5 U.S.C. 605. Because of the size of the 
transactions necessary to invoke an HSR Filing, the premerger 
notification rules rarely, if ever, affect small entities.\83\ The 2000 
amendments to the Act exempted all transactions valued at $50 million 
or less, with subsequent automatic adjustments to take account of 
changes in Gross National Product resulting in a current threshold of 
$111 million. Further, none of the proposed amendments expands the 
coverage of the premerger notification rules in a way that would affect 
small entities. Accordingly, the Commission certifies that these 
proposed amendments will not have a significant economic impact on a 
substantial number of small entities. This document serves as the 
required notice of this certification to the Small Business 
Administration.
---------------------------------------------------------------------------

    \83\ See 13 CFR part 121 (regulations defining small business 
size).
---------------------------------------------------------------------------

Invitation To Comment

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 28, 2023. 
Write ``16 CFR parts 801-803--Hart-Scott-Rodino Coverage, Exemption, 
and Transmittal Rules, Project No. P239300'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the https://www.regulations.gov/ website.
    Because of the agency's security screening, postal mail addressed 
to the Commission will be subject to delay. We strongly encourage you 
to submit your comment online through https://www.regulations.gov/. To 
ensure the Commission considers your online comment, please follow the 
instructions on the web-based form.
    If you file your comment on paper, write ``16 CFR parts 801-803--
Hart-Scott-Rodino Coverage, Exemption, and Transmittal Rules, Project 
No. P239300'' on your comment and on the envelope, and mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610, (Annex H), 
Washington, DC 20580. If possible, please submit your paper comment to 
the Commission by overnight service.
    Because your comment will be placed on the publicly accessible 
website, https://www.regulations.gov/, you are solely responsible for 
making sure that your comment does not include any sensitive or 
confidential information. In particular, your comment should not 
contain sensitive personal information, such as your or anyone else's 
Social Security number; date of birth; driver's license number or other 
state identification number or foreign country equivalent; passport 
number; financial account number; or credit or debit card number. You 
are also responsible for making sure your comment does not include any 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or

[[Page 42209]]

any commercial or financial information which . . . is privileged or 
confidential,''--as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including, in 
particular, competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). 
The written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(b). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted publicly at https://www.regulations.gov/--as legally 
required by FTC Rule 4.9(b), 16 CFR 4.9(b)--we cannot redact or remove 
your comment, unless you submit a confidentiality request that meets 
the requirements for such treatment under FTC Rule 4.9(c), 16 CFR 
4.9(c), and the General Counsel grants that request.
    Visit the Commission's website, www.ftc.gov, to read this 
publication and the news release describing it. The FTC Act and other 
laws that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before August 28, 2023. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

List of Subjects in 16 CFR Parts 801 and 803

    Antitrust.

    For the reasons stated in the preamble, the Federal Trade 
Commission proposes amending 16 CFR parts 801 and 803 as set forth 
below:

PART 801--COVERAGE RULES

0
1. The authority citation for part 801 continues to read as follows:

    Authority: 15 U.S.C. 18a(d).

0
2. Amend Sec.  801.1 by adding paragraph (r) to read as follows:


Sec.  801.1   Definitions

* * * * *
    (r)(1) Foreign entity or government of concern. The term foreign 
entity or government of concern means: (i) An entity that is a foreign 
entity of concern as that term is defined in section 40207 of the 
Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5)); or
    (ii) A government, or an agency thereof, of a foreign country that 
is a covered nation as that term is defined in section 40207 of the 
Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5)(C)).
    (2) Subsidy. The term subsidy has the meaning given the term in 
Part IV of Title VII of the Tariff Act of 1930 (19 U.S.C. 1677(5)(B)).

PART 803--TRANSMITTAL RULES

0
3. The authority citation for part 803 continues to read as follows:

    Authority:  15 U.S.C. 18a(d).

0
4. Amend Sec.  803.2 by:
0
a. Redesignating paragraph (a) as (a)(1) and adding paragraph (a)(2);
0
b. Removing paragraph (b)(1)(v); and
0
c. Revising paragraphs (e) and (f). The revisions and additions read as 
follows:


Sec.  803.2  Instructions applicable to Notification and Report Form.

    (a)(1) The notification required by the act shall be filed by the 
preacquisition ultimate parent entity, or by any entity included within 
the person authorized by such preacquisition ultimate parent entity to 
file notification on its behalf. In the case of a natural person 
required by the act to file notification, such notification may be 
filed by his or her legal representative: Provided however, That 
notwithstanding Sec. Sec.  801.1(c)(2) and 801.2 of this chapter, only 
one notification shall be filed by or on behalf of a natural person, 
spouse and minor children with respect to an acquisition as a result of 
which more than one such natural person will hold voting securities of 
the same issuer.
    Example:
    Jane Doe, her husband, and minor child collectively hold more than 
50 percent of the shares of family corporation F. Therefore, Jane Doe 
(or her husband or minor child) is the ``ultimate parent entity'' of a 
``person'' composed to herself (or her husband or minor child) and F; 
see paragraphs (a)(3), (b) and (c)(2) of Sec.  801.1 of this chapter. 
If corporation F is to acquire corporation X, under this paragraph only 
one notification is to be filed by Jane Doe, her husband, and minor 
child collectively.
    (2) Persons that are both acquiring and acquired persons should 
submit separate forms, one as the acquiring person and one as the 
acquired person, following the appropriate instructions for each.
* * * * *
    (e) For documents required by item 4(b) of the Notification and 
Report Form, a person filing the notification may, instead of 
submitting a document, provide a cite to an operative internet address 
directly linking to the document, if the linked document is complete 
and payment is not required to access the document. If an internet 
address becomes inoperative during the waiting period, or the document 
is otherwise rendered inaccessible or incomplete, upon notification by 
the Commission or Assistant Attorney General, the parties must make the 
document available to the agencies by either referencing an operative 
internet address where the complete document may be accessed or by 
providing electronic copies to the agencies as provided in Sec.  
803.10(c)(1) by 5 p.m. on the next regular business day. Failure to 
make the document available, by the internet or by providing electronic 
copies, by 5 p.m. on the next regular business day, will result in 
notice of a deficient filing pursuant to Sec.  803.10(c)(2).
    (f) Filings must comply with all format requirements set forth at 
the Premerger Notification Office pages at https://www.ftc.gov. The use 
of any format not specified as acceptable, or any other failure to 
comply with the applicable format requirements, shall render the entire 
filing deficient within the meaning of Sec.  803.10(c)(2).
0
5. Amend Sec.  803.5 by revising paragraphs (a)(1), (3) and (b) to read 
as follows:


Sec.  803.5   Affidavits required.

    (a)(1) Section 801.30 acquisitions. For acquisitions to which Sec.  
801.30 of this chapter applies, the notification required by the act 
from each acquiring person shall contain an affidavit attesting that 
the issuer or unincorporated entity whose voting securities or non-
corporate interests are to be acquired has received written notice 
delivered to an officer (or a person exercising similar functions in 
the case of an entity without officers) by email, certified or 
registered mail, wire, or hand delivery, at its principal executive 
offices, of:
* * * * *
    (3) The affidavit required by this paragraph must have attached to 
it a copy of the written notice received by the acquired person 
pursuant to paragraph (a)(1) of this section.
    (b) Non-section 801.30 acquisitions. For acquisitions to which 
Sec.  801.30 of

[[Page 42210]]

this chapter does not apply, the notification required by the act shall 
contain an affidavit attesting that a contract, agreement in principle, 
or letter of intent to merge or acquire has been executed, and further 
attesting to the good faith intention of the person filing notification 
to complete the transaction. If a definitive agreement is not provided, 
the affidavit must attest that a term sheet or draft agreement that 
describes with specificity the scope of the transaction that will be 
consummated has been submitted with the executed letter of intent or 
agreement in principle.
0
6. Revise Sec.  803.8 to read as follows:


Sec.  803.8   Foreign language documents.

    Documentary materials or information in a foreign language required 
to be submitted at the time of filing a Notification and Report Form 
and in response to a request for additional information or documentary 
material must be submitted with verbatim English language translations. 
All verbatim translations must be understandable, accurate, and 
complete.
0
7. Amend Sec.  803.10 by revising paragraphs (c)(1)(i) and (ii) to read 
as follows:


Sec.  803.10  Running of time.

* * * * *
    (c)(1)(i) The date of receipt shall be the date of electronic 
submission if such date is not a Saturday, Sunday, a legal public 
holiday (as defined in 5 U.S.C. 6103(a)), or a legal public holiday's 
observed date, and the submission is completed by 5:00 p.m. eastern 
time. In the event electronic submission is unavailable, the FTC and 
DOJ may designate procedures for the submission of the filing. 
Notification of the alternate delivery procedures will normally be made 
through a press release and, if possible, on the https://www.ftc.gov 
website.
    (ii) Delivery effected after 5 p.m. eastern time on a business day, 
or at any time on any day other than a business day, shall be deemed 
effected on the next following business day. If submission of all 
required filings is not effected on the same date, the date of receipt 
shall be the latest of the dates on which submission is effected.
* * * * *
0
8. Amend Sec.  803.12 by revising paragraph (c)(1)(iii) to read as 
follows:


Sec.  803.12  Withdraw and refile notification.

* * * * *
    (c) * * *
    (1) * * * (iii) The resubmitted notification is recertified, and 
the submission, as it relates to Transaction-specific Agreements 
(including the latest drafts, if definitive agreements have not been 
signed), Transaction-Related Documents (including Documents Prepared by 
or for Officers, Directors or Supervisory Deal Team Leads; Confidential 
Information Memorandum; Studies, Surveys, Analyses, and Reports; 
Synergies and Efficiencies) and Subsidies from Foreign Entities of 
Concern in the Instructions, is updated to the date of the 
resubmission;
* * * * *
0
9. Revise Appendices A and B to part 803 to read as follows:
[INSERT GENERAL INSTRUCTIONS AND INFORMATION]

Antitrust Improvements Act Notification for Certain Mergers and 
Acquisitions

General Instructions And Information

    These instructions specify the information that must be 
submitted pursuant to Sec.  803.1(a) of the premerger notification 
rules, 16 CFR parts 801-803 (``the Rules''). Submitted materials 
must be provided to the Federal Trade Commission (``FTC'') and to 
the Antitrust Division of the Department of Justice (``DOJ'') 
(together, ``the Agencies'').

Information

    The central office for information and assistance concerning the 
Rules is: Premerger Notification Office Federal Trade Commission, 
Room #5301, 400 7th Street SW, Washington, DC 20024, Phone: (202) 
326-3100, Email: [email protected] for rules questions, 
[email protected] for filing information.
    Copies of these Instructions, the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976 (``the Act''), the Rules, Federal Register 
publications issuing the Rules and Rule amendments (``Statements of 
Basis and Purpose''), as well as information to assist in submitting 
the required information are available at the FTC's Premerger 
Notification Office (``PNO'') website.

Definitions and Explanation of Terms

    Unless otherwise indicated, the definitions provided in the 
Rules apply to these Instructions.

Dollar Values

    All financial information should be expressed in millions of 
dollars rounded to the nearest hundred thousand.

Economic Research Service's Commuting Zones

    When submitting information by the Economic Research Service's 
(``ERS's'') Commuting Zones (``CZ''), refer to the U.S. Department 
of Agriculture's Economic Research Service Commuting Zones for the 
year 2000, available at https://www.ers.usda.gov/data-products/commuting-zones-and-labor-market-areas/.

Fee Information

    The filing fee is based on the aggregate total value of assets, 
voting securities, and controlling non-corporate interests to be 
held as a result of the acquisition. Filing fee tiers are adjusted 
annually pursuant to 15 U.S.C. 18a(a)(note) based on the change in 
gross national product, in accordance with 15 U.S.C. 19(a)(5). For 
each fiscal year commencing after September 30, 2023, filing fees 
will increase by the percentage increase, if any, in the consumer 
price index (``CPI'') over the CPI for the fiscal year ending 
September 30, 2022, pursuant to 15 U.S.C. 18a(a)(note). For current 
thresholds and fee information, see the PNO website.

North American Industry Classification System (NAICS) Data

    When reporting information by 6-digit NAICS code, refer to the 
North American Industry Classification System--United States, 2022, 
published by the Executive Office of the President, Office of 
Management and Budget, available at https://www.census.gov/naics/. 
This website also provides guidance in choosing the proper code(s).

Person Filing and Filing Person

    The terms ``person filing'' or ``filing person'' mean the 
ultimate parent entity (``UPE''). See Sec.  801.1(a)(3). The terms 
are used herein interchangeably.

Standard Occupational Classification

    When reporting information by 6-digit Standard Occupational 
Classification (``SOC'') code, refer to the 2018 SOC System, 
available at https://www.bls.gov/soc/2018/#classification.

Thresholds

    Notification thresholds are adjusted annually based on the 
change in gross national product, in accordance with 15 U.S.C. 
19(a)(5). See Sec.  801.1(h). The current threshold values can be 
found at Current Filing Thresholds.

Year

    All references to ``year'' refer to calendar year. If data are 
not available on a calendar year basis, supply the requested data 
for the fiscal year reporting period that most nearly corresponds to 
the calendar year specified. References to ``most recent year'' mean 
the most recent calendar or fiscal year for which the requested 
information is available.

Filing

    If the UPE is both an acquiring and acquired person, separate 
filings must be submitted, one as the acquiring person and one as 
the acquired person, following the appropriate instructions for 
each. See Sec.  803.2(a)(2).
    Filings should be submitted electronically consistent with the 
instructions on the PNO website. If the electronic submission 
platform is unavailable, the Agencies may announce sites for 
delivery through the media and, if possible, at the PNO website.

Responses

    Items that require the submission of documents or narrative 
responses should be produced in (1) searchable PDF format from which 
text can be copied or (2) Excel formats.
    All documents should be logged in an Excel File. The log should 
list all responsive

[[Page 42211]]

documents, regardless of whether the document is redacted or 
withheld for privilege. For each document, indicate:
    1. The document number;
    2. Request(s) to which the document is responsive;
    3. Title;
    4. Date;
    5. Authors and job titles; and
    6. Whether the document is privileged.
    Indented and bolded headings in these Instructions should each 
be considered a separate request.
    If a group of people prepared the document, list all the authors 
and their titles, identifying the principal authors. Alternatively, 
it is acceptable to indicate that the document was prepared under 
the supervision of the lead author and to provide the name and title 
of that author. If the filing person engaged a third party to 
prepare a document, provide the name of the third party, and the 
name, title, and company name for the individual within the filing 
person who supervised the creation of the document, or for whom the 
document was prepared. For materials received from a third party 
that was not engaged by the filing person, only the name of the 
third party is required.
    If parties submit documents in addition to what is required, 
such documents should be identified as ``Voluntary''. See Sec.  
803.1(b).
    Submit only one copy of identical responsive documents.
    For each narrative response, indicate the document number for 
each document that supports the narrative and the request to which 
the narrative is responsive.

Privilege

    For privileged documents, the filing person must also provide 
the following in the Responses log:
    1. The privilege type (redacted or withheld);
    2. The privilege claim;
    3. Addressee(s) and all recipients, with company name and title, 
of the original and any copies;
    4. Subject matter;
    5. Document's present location; and
    6. Who has control over it.
    If a privileged document was circulated to a group, such as the 
board or an investment committee, the name of the group is 
sufficient, but the filing person should be prepared to disclose the 
names and titles/positions of the individual group members, if 
requested.
    If the claim of privilege is based on advice from inside and/or 
outside counsel, the name of the inside and/or outside counsel 
providing the advice (and the law firm, if applicable) must be 
provided. If several lawyers participated in providing advice, 
identifying lead counsel is sufficient. In identifying who controls 
a document, the name of the law firm is sufficient.

Translations

    Materials or information in a foreign language must be 
translated into English, with the English translation attached to 
the foreign language version. See Sec.  803.8.

Non-Compliance

    If unable to answer any item fully, provide such information as 
is available and a statement of reasons for non-compliance as 
required by Sec.  803.3. If exact answers to any item cannot be 
given, enter best estimates and indicate the source or basis of such 
estimates. Add an endnote with the notation ``est.'' to any item 
where data are estimated.

Limited Response

    Information need not be supplied regarding assets, voting 
securities, or non-corporate interests currently being acquired when 
their acquisition is exempt under the Act or Rules. See Sec.  
803.2(c).

Ultimate Parent Entity Information

UPE Details

Name

    Provide the name, headquarters address, and website (if one 
exists) of the person filing notification. The name of the person 
filing is the name of the UPE. See Sec.  801.1(a)(3).

Entity Type

    Specify whether the UPE is a corporation, unincorporated entity, 
natural person, or other entity type (specify). See Sec.  801.1.

Acquiring or Acquired Person

    Indicate whether the filing is being made as an acquiring or 
acquired person.

Filing Made on Behalf of the UPE

    If the filing is being made on behalf of the UPE by another 
entity within the same person that is authorized by the UPE to file 
the notification on its behalf pursuant to Sec.  803.2(a), or filed 
pursuant to Sec.  803.4 on behalf of a foreign person, provide the 
name and mailing address of the entity filing the notification on 
behalf of the UPE.

Contact Information

    Provide the name and title, firm name, address, telephone 
number, and email address of two individuals (primary and secondary) 
to contact regarding the filing. See Sec.  803.20(b)(2)(ii).

Second Request Contact Information

    Provide the name, firm name, address, telephone number, and 
email address of an individual located in the United States 
designated for the limited purpose of receiving notice of the 
issuance of a request for additional information or documentary 
material. See Sec.  803.20(b)(2).

Annual Reports and Financial Information

Central Index Key

    Provide the names of all entities within the person filing the 
notification, including the UPE, that file annual reports (Form 10-K 
or Form 20-F) with the United States Securities and Exchange 
Commission, and provide the Central Index Key (CIK) number for each 
entity.

Annual Reports and Audit Reports

    Provide the most recent annual reports and/or annual audit 
reports (or, if audited is unavailable, unaudited) of the person 
filing notification.
    The acquiring person should also provide the most recent reports 
of the acquiring entity(s) and any entity controlled by the 
acquiring person whose revenues contribute to a NAICS overlap or any 
overlap identified in the Horizontal Overlap Narrative.
    The acquired person should also provide the most recent reports 
of the acquired entity(s).
    Natural person UPEs should not provide personal balance sheets 
or tax returns. Natural person UPEs should instead provide the most 
recent reports for the highest-level entity(s) they control.
    The person filing notification may incorporate a document 
responsive to this item by reference to an internet address directly 
linking to the document. See Sec.  803.2(e).

Size of Person

    If applicable, indicate whether the UPE stipulates that it meets 
the size of person test. See 15 U.S.C. 18a(a).

Organization Structure

    If the acquisition includes only assets that do not comprise 
substantially all the assets of an operating unit, the acquired 
person should not complete the questions in this section. Otherwise, 
the acquired person must complete these questions for the portion of 
the transaction related to the voting securities, non-corporate 
interests, and assets that comprise substantially all the assets of 
an operating unit.

Entities Within the Acquiring Person and Acquired Entity

    List the name, city, state/country, and zip code of all U.S. 
entities, and all foreign entities that have sales in or into the 
United States, that are included within the acquiring person, or 
acquired entity (as appropriate). Entities with total assets of less 
than $10 million may be omitted. Alternatively, the acquiring person 
or acquired entity (as appropriate) may report all entities within 
it. Also list all names under which the entities do business or have 
done business within the past 3 years (e.g., d/b/a or f/k/a names).
    The list of entities should be organized by operating company or 
operating business/unit (``top-level entity''), if applicable.

Minority Shareholders and Other Non-Controlling Entities

Acquiring Person

    Provide a narrative response describing the ownership structure 
of the acquiring entity.
    For transactions where a fund or master limited partnership is 
the UPE, also provide an organizational chart sufficient to identify 
and show the relationship of all entities that are affiliates or 
associates. See Sec.  801.1(d).
    Additionally, list the name, headquarters mailing address, and 
approximate percentage of holdings for any individual or entity that 
currently holds, or will hold as a result of the transaction, 5% or 
more but less than 50% of the voting securities or non-corporate 
interests of (1) the acquiring entity, (2) any entity directly or 
indirectly controlled by the acquiring entity, (3) any entity that 
directly or indirectly controls the acquiring entity, and (4) any 
entity within the acquiring person that has been or will be created 
in contemplation of, or for the purposes of, effectuating the 
transaction. Entities related

[[Page 42212]]

to master limited partnerships, funds, investment groups, or similar 
entities that do business under a common name should also have the 
d/b/a or ``street name'' of such group listed.
    For limited partnerships, the general partner(s), regardless of 
percentage held, should also be listed.
    If the identity of minority investors or percentage to be held 
is not finalized at time of filing, provide good faith estimates and 
explain.

Acquired Person

    Provide a narrative response, describing the ownership structure 
of the acquired entity(s).
    Additionally, list the name, headquarters mailing address, and 
approximate percentage held for any holders of 5% or more but less 
than 50% of (1) the acquired entity(s), and (2) any entity within 
the acquired entity(s), but only if such holder will continue to 
hold an interest (whether voting securities or non-corporate 
interests) in such entity(s), or will acquire an interest in any 
entity within the acquiring person as a result of the transaction.
    For limited partnerships, the general partner(s), regardless of 
percentage held, should also be listed.

Other Types of Interest Holders That May Exert Influence

    For the Acquiring Person Only: Identify every entity and 
individual (other than those employed by the acquiring person or an 
entity it controls) that, upon consummation or as a result of 
agreements related to consummation:
    1. Provides, has provided (and still is a creditor), or will 
provide credit to the acquiring entity, an entity the acquiring 
entity directly or indirectly controls, or an entity that directly 
or indirectly controls the acquiring entity. Do not list individuals 
or entities if the amount of credit they have provided or will 
provide is less than 10% of the value of that entity;
    2. Holds non-voting securities (including options or warrants) 
of the acquiring entity, an entity the acquiring entity directly or 
indirectly controls, or an entity that directly or indirectly 
controls the acquiring entity, where such non-voting securities are 
valued at more than 10% of that entity;
    3. Is a board member or board observer or has the right to 
nominate or appoint a board member or board observer of the 
acquiring entity, an entity the acquiring entity directly or 
indirectly controls, or an entity that directly or indirectly 
controls the acquiring entity; or
    4. Has an agreement to manage the acquiring entity, an entity 
the acquiring entity directly or indirectly controls, or an entity 
that directly or indirectly controls the acquiring entity.
    For every individual or entity identified, provide the name, 
contact information, the percent of voting securities or non-
corporate interests owned (if any), and a description of the 
relevant relationship(s) above.

Officers, Directors, and Board Observers

    For each entity within the acquiring person or acquired entity 
(as applicable), list by entity all current officers, directors, and 
board observers (or in the case of unincorporated entities, 
individuals exercising similar functions), as well as those who have 
served in the position within the past 2 years.
    Additionally, list all individuals who will or are likely to 
serve as an officer, director, or board observer of an entity within 
the acquiring person as a result of or as contemplated by the 
transaction. Organize the response by entity and include entities 
that are not yet created but are expected to be created as a result 
of or as contemplated by the transaction. If the identities of the 
prospective officers, directors, and board observers are unknown, 
briefly describe who will have the authority to select them.
    For each officer, director and board observer identified, list 
all other entities for which the individual serves, or has served 
within the last two years, as an officer, director, or board 
observer.

Transaction Information

Parties

    List the name and mailing address of each acquiring and acquired 
person, and acquiring and acquired entity, whether or not required 
to file a notification. Do not list entities controlled by an 
acquired entity.

Acquiring UPE

    Provide the name, headquarters address, and website (if one 
exists) of the acquiring person.

Acquiring Entity

    If an entity other than the acquiring UPE is making the 
acquisition, provide the name, mailing address, and website of that 
entity.

Acquired UPE

    Provide the name, headquarters address, and website (if one 
exists) of the acquired person.

Acquired Entity

    If the assets, voting securities, or non-corporate interests of 
an entity other than the acquired UPE are being acquired, provide 
the name, mailing address, and website of that entity.

Filing Fee

Total Expected Filing Fee

    Indicate the value of the total required fee for the 
transaction.

Parties Paying the Fee

    Indicate which filing party(s) is paying the filing fee and, if 
applicable, whether the portion of the fee being paid by the filer 
is being paid by multiple entities associated with the filer. For 
each entity paying a portion of the fee, provide the name of payer, 
the amount paid, the payment method, and the Electronic Wire 
Transfer (EWT) confirmation number or check number.
    Note on Paying by EWT: In order for the FTC to track payment, 
the payer must provide information required by the Fedwire 
Instructions to the financial institution initiating the EWT. A 
template of the Fedwire Instructions is available at the PNO website 
on the Filing Fee Information page.
    Note on Paying by Check: The FTC strongly discourages check 
payments. However, if an EWT cannot be arranged, the FTC will accept 
a check, sent to Financial Operations. Cashiers' or certified checks 
are preferred. Make the check payable to the Federal Trade 
Commission and deliver to: Federal Trade Commission, Financial 
Operations Division, 600 Pennsylvania Ave., Drop H-790, Washington, 
DC 20580.
    Please note that the waiting period may be delayed until the fee 
has been confirmed.

Transaction Details

    801.30 Transaction:
    Indicate whether the transaction is subject to Sec.  801.30.

Transaction Type

    Indicate whether the transaction is a(n):
     Acquisition of voting securities;
     Acquisition of non-corporate interests;
     Acquisition of assets;
     Merger (see Sec.  801.2);
     Consolidation (see Sec.  801.2);
     Formation of a joint venture, other corporation, or 
unincorporated entity (see Sec. Sec.  801.40 and 801.50);
     Bankruptcy that is subject to Section 363(b) of the 
Bankruptcy Code (11 U.S.C. 363);
     Cash Tender Offer;
     Acquisition subject to Sec.  801.31;
     Secondary acquisition subject to Sec.  801.4;
     Acquisition subject to Sec.  801.2(e); and/or
     Acquisition consummated in violation of the HSR Act.

Acquisition Details

    Provide the requested information for the value and percentage 
of assets, voting securities, and non-corporate interests to be 
acquired. If a combination of assets, voting securities, and/or non-
corporate interests are being acquired and allocation is not 
possible, note such information in an endnote.
    For determining percentage of voting securities, evaluate total 
voting power per Sec.  801.12.
    For determining percentage of non-corporate interests, evaluate 
the economic interests per Sec.  801.1(b)(1)(ii).
     State the value of voting securities already held by 
the acquiring person. See Sec.  801.10.
     State the percentage of voting securities already held 
by the acquiring person. See Sec.  801.12.
     State the total value of voting securities to be held 
by the acquiring person as a result of the acquisition. See Sec.  
801.10.
     State the total percentage of voting securities to be 
held by the acquiring person as a result of the acquisition. See 
Sec.  801.12.
     State the value of non-corporate interests already held 
by the acquiring person. See Sec.  801.10.
     State the percentage of non-corporate interests already 
held by the acquiring person. See Sec.  801.1(b)(1)(ii).
     State the total value of non-corporate interests to be 
held by the acquiring person as a result of the acquisition. See 
Sec.  801.10.
     State the total percentage of non-corporate interests 
to be held by the acquiring person as a result of the acquisition. 
See Sec. Sec.  801.10 and 801.1(b)(1)(ii).
     State the value of assets to be held by the acquiring 
person as a result of the acquisition. See Sec.  801.10.

[[Page 42213]]

     State the aggregate total value of assets, voting 
securities, and non-corporate interests of the acquired person to be 
held by the acquiring person as a result of the acquisition. See 
Sec. Sec.  801.10, 801.12, 801.13 and 801.14.

Notification Threshold

    This item should only be completed by the acquiring person when 
voting securities are being acquired. If more than voting securities 
are being acquired, respond to this item only regarding voting 
securities. Indicate the highest applicable threshold for which 
notification is being filed. See Sec.  801.1(h).
     $50 million (as adjusted);
     $100 million (as adjusted);
     $500 million (as adjusted);
     25% (if the value of voting securities to be held is 
greater than $1 billion, as adjusted);
     50%;
     N/A.
    Note that the 50% notification threshold is the highest 
threshold and should be used for any acquisition of 50% or more of 
the voting securities of an issuer, regardless of the value of the 
voting securities. For instance, an acquisition of 100% of the 
voting securities of an issuer valued in excess of $500 million (as 
adjusted) would cross the 50% notification threshold, not the $500 
million (as adjusted) threshold.

Transaction Description

Business of the Acquiring Person

    Acquiring Person Only: Describe the business operation(s) of all 
entities within the acquiring person.

Business of the Acquired Entity

    Describe the business operation(s) being acquired. If assets, 
describe the assets and whether they comprise a business operation.

Non-Reportable UPE(s)

    Provide the names of any non-reportable UPE(s).

Transaction Description

    Briefly describe the transaction, indicating whether assets, 
voting securities, or non-corporate interests (or some combination) 
are to be acquired. Indicate what consideration will be received by 
each party and the scheduled consummation date of the transaction. 
Also identify any special circumstances that apply to the filing, 
such as whether part of the transaction is exempt under one of the 
exemptions found in Part 802.
    If any attached transaction documents use code names to refer to 
the parties, provide an index identifying the codes.

Transaction Rationale

    Identify and explain each strategic rationale for the 
transaction discussed or contemplated by the filing person, or any 
of its officers, directors, or employees. If the acquiring entity is 
different from the UPE, submit an explanation for each entity. 
Identify each document produced in the filing that confirms or 
discusses the stated rationale(s).

Transaction Diagram

    Submit a diagram of the transaction and provide a chart 
explaining the relationship between all entities and/or natural 
persons involved in the transaction.

Related Transactions

    Indicate whether the transaction that is the subject of this 
filing has related filings because the transaction:
     Is a principal transaction that triggers one or more 
shareholder backside transactions;
     Is a shareholder backside transaction;
     Has more than one acquiring UPE;
     Has more than one acquired UPE;
     Has more than one reportable step;
     Is a joint venture;
     Is a consolidation;
     Is an exchange of assets; or
     Has other circumstance that requires more than one 
filing.
    Provide additional details regarding the related transaction(s), 
such as party names and transaction numbers.

Early Termination

    Indicate whether the filing person requests early termination. 
Notification of each grant of early termination will be published in 
the Federal Register, as required by 15 U.S.C. 18a(b)(2), and on the 
PNO website. Note that if either party in any transaction requests 
early termination, it may be granted and published.

Joint Ventures

    See Sec. Sec.  801.40 and 801.50.

Contributions

    List the contributions that each person forming the joint 
venture corporation or unincorporated entity has agreed to make, 
specifying when each contribution is to be made and the value of the 
contribution as agreed by the contributors.

Consideration

    Describe fully the consideration that each person forming the 
joint venture corporation or unincorporated entity will receive in 
exchange for its contribution(s).

Business Description

    Describe generally the business in which the joint venture 
corporation or unincorporated entity will engage, including its 
principal types of products or activities, and the geographic areas 
in which it will do business.

NAICS Codes

    Identify each 6-digit NAICS industry code in which the joint 
venture corporation or unincorporated entity will derive dollar 
revenues.

Agreements and Timeline

Transaction-Specific Agreements

    Furnish copies of all documents that constitute the agreement(s) 
related to the transaction, including, but not limited to, exhibits, 
schedules, side letters, agreements not to compete or solicit, and 
other agreements negotiated in conjunction with the transaction.
    Documents that constitute the agreement(s) (e.g., Agreement and 
Plan of Merger, Letter of Intent, Purchase and Sale Agreement, Asset 
Purchase Agreement, Stock/Securities Purchase Agreement) must be 
executed, while supporting agreements, such as employment agreements 
and agreements not to compete may be provided in draft form if that 
is the most recent version. If there is no definitive executed 
agreement, provide a copy of the most recent draft agreement or term 
sheet that provides sufficient detail about the scope of the entire 
transaction that the parties intend to consummate. See Sec.  803.5.
    Note that transactions subject to Sec.  801.30 and bankruptcies 
under 11 U.S.C. 363(b) do not require an executed agreement. For 
bankruptcies, provide the order from the bankruptcy court.

Other Agreements Between the Parties

    Provide all other agreements between the acquiring and acquired 
person, including but not limited to, non-compete or non-
solicitation agreements, supply agreements, or licensing agreements 
including current agreements and those that expired, have 
terminated, or were canceled within one year of the filing.

Timeline

    Provide a detailed timetable for the transaction, including when 
the signatories intend to consummate the transaction, or implement 
all closing conditions, integration, affiliation, or other purchase 
agreements, and any other important deadlines for closing or 
terminating the merger agreement. Identify all provisions in the 
agreement that govern the extension of these deadlines and explain 
the conditions for extending deadlines and how long they may be 
extended. Also, if applicable, provide a description of any fee or 
other consideration paid or to be paid at key dates of the 
transaction or upon closing, including but not limited to 
termination fees, break fees, ticking fees, and any other 
arrangement intended to serve in lieu of a break fee.

Competition and Overlaps

Business Documents

Transaction-Related Documents

Documents Prepared by or for Officers, Directors, or Supervisory Deal 
Team Lead(s)

    Provide all studies, surveys, analyses, and reports prepared by 
or for any officer(s), director(s), or supervisory deal team lead(s) 
for the purpose of evaluating or analyzing the acquisition with 
respect to market shares, competition, competitors, markets, 
potential for sales growth, or expansion into product or geographic 
markets. For unincorporated entities, provide such documents 
prepared by or for individuals exercising similar functions as 
officers and directors, as well as the supervisory deal team 
lead(s).

Confidential Information Memoranda

    Provide all confidential information memoranda prepared by or 
for any officer(s) or director(s) (or, in the case of unincorporated 
entities, individuals exercising similar functions) of the UPE of 
the acquiring or acquired person or of the acquiring or acquired 
entity(s) that specifically relate to the sale of the acquired 
entity(s) or assets. If no such confidential information memorandum 
exists, submit any document(s) given to any officer(s) or

[[Page 42214]]

director(s) of the buyer meant to serve the function of a 
confidential information memorandum. This does not include ordinary 
course documents and/or financial data shared in the course of due 
diligence, except to the extent that such materials served the 
purpose of a confidential information memorandum when no such 
confidential information memorandum exists.
    Documents responsive to this item are limited to those produced 
within one year before the date of filing.

Studies, Surveys, Analyses, and Reports

    Provide all studies, surveys, analyses and reports prepared by 
investment bankers, consultants, or other third party advisors 
(``third party advisors'') for any officer(s) or director(s) (or, in 
the case of unincorporated entities, individuals exercising similar 
functions) of the UPE of the acquiring or acquired person or of the 
acquiring or acquired entity(s) for the purpose of evaluating or 
analyzing market shares, competition, competitors, markets, 
potential for sales growth or expansion into product or geographic 
markets that specifically relate to the sale of the acquired 
entity(s) or assets. This item requires only materials developed by 
third party advisors during an engagement or for the purpose of 
seeking an engagement.
    Documents responsive to this item are limited to those produced 
within one year before the date of filing.

Synergies and Efficiencies

    Provide all studies, surveys, analyses, models, and reports 
evaluating or analyzing synergies, financial projections, and/or 
efficiencies prepared by or for any officer(s) or director(s) (or, 
in the case of unincorporated entities, individuals exercising 
similar functions) for the purpose of evaluating or analyzing the 
acquisition. Financial models without stated assumptions need not be 
provided.

Drafts

    For each responsive Transaction-Related Document, provide drafts 
of the document that were sent to an officer, director, or 
supervisory deal team lead(s).

Periodic Plans and Reports

    Provide all semi-annual or quarterly plans and reports that were 
provided to the Chief Executive Officer (CEO) of the acquiring or 
acquired entity (as appropriate) and any entity that it controls or 
is controlled by and individuals who report directly to each such 
CEO (but excluding individuals responsible solely for environmental, 
tax, human resources, pensions, benefits, ERISA, or OSHA issues) 
that analyze market shares, competition, competitors, or markets 
pertaining to any product or service also produced, sold, or known 
to be under development by the other party (acquiring person or 
acquired entity as appropriate). Documents responsive to this item 
are limited to those prepared or modified within one year of the 
date of filing.
    Provide all plans and reports (including semi-annual or 
quarterly) that were provided to the Board of Directors of the 
acquiring or acquired entity (as appropriate) and any entity that it 
controls or is controlled by that analyze market shares, 
competition, competitors, or markets pertaining to any product or 
service also produced, sold, or known to be under development by the 
other party (acquiring person or acquired entity as appropriate). 
Documents responsive to this item are limited to those prepared or 
modified within one year of the date of filing.

Organizational Chart of Authors and Recipients

    Provide an organizational chart(s) that identifies the 
position(s) held by authors, and for privileged documents, 
recipients, of all business documents submitted. Filing persons 
should indicate on the organizational chart(s) the individuals whose 
files were searched for documents responsive to these Instructions.

Competition Analysis

Horizontal Overlap Narrative

    Describe each of the principal categories of products and 
services (as defined in the day-to-day operations) of the acquiring 
person or acquired entity (as applicable).
    In addition, list and describe each of the current or known 
planned products or services of the acquiring person or acquired 
entity (as appropriate) that competes with (or could compete with) a 
current or known planned product or service of the other party 
(acquiring person or acquired entity as appropriate). Current or 
known planned products or services include those that the acquiring 
person or acquired entity researches, develops, manufactures, 
produces, sells, offers, provides, supplies, or distributes. For 
each such product or service listed, provide:
    1. The sales (in units and dollars) for each of the past two 
fiscal years. For those products or services not generating revenue 
or whose performance is not measured by revenue in the ordinary 
course of business, provide projected revenue, estimates of the 
volume of products to be sold, time spent using the service, or any 
other metric by which the acquiring person or acquired entity (as 
appropriate) measures performance (e.g., daily users, new signups).
    2. A description of all categories of customers of the acquiring 
person or acquired entity (as appropriate) that purchase or use the 
product or service (e.g., retailer, distributor, broker, government, 
military, educational, national account, local account, commercial, 
residential, or institutional), and an estimate of how much of the 
product or service each customer category purchased or used monthly 
for the last fiscal year. If no customers have yet used the product 
or service, provide the date that development of the product or 
service began; a description of the current stage in development, 
including any testing and regulatory approvals and any planned 
improvements or modifications; the date that development (including 
testing and regulatory approvals) was or will be completed; and the 
date that the product or service is expected to be sold or otherwise 
commercially launched.
    3. Contact information (including individual's name, title, 
phone, and email) for the acquiring person's or acquired entity's 
(as appropriate) top 10 customers in the last fiscal year (as 
measured in both units and dollars), and the top 10 customers for 
each customer category identified.
    4. A description of any licensing arrangements.
    5. A description, including duration, of any non-compete or non-
solicitation agreement applicable to employees or business units 
related to the product or service.

Supply Relationships Narrative

    Related Sales: List and describe each product, service, or asset 
(including data) that the acquiring person or acquired entity (as 
applicable) has sold, licensed, or otherwise supplied in the last 
two fiscal years (1) to the other party (acquiring person or 
acquired entity as appropriate), or (2) to any other business that, 
to the filing person's knowledge or belief, uses its product, 
service, or asset to compete with the other party's products or 
services, or as an input for a product or service that competes or 
is intended to compete with the other party's products or services.
    For each product, service, or asset listed, provide:
    1. The sales (in units and dollars and any other appropriate 
measure) for each of the past two fiscal years, separately to (1) 
the other party (acquiring person or acquired entity as appropriate) 
and (2) any other business that, to the filing person's knowledge or 
belief, uses its product, service, or asset to compete with the 
other party's products or services, or as an input for a product or 
service that competes or is intended to compete with the other 
party's products or services.
    2. The top 10 customers (as measured in both units and dollars) 
of the acquiring person or acquired entity (as appropriate) that use 
the acquiring person's or acquired entity's (as appropriate) 
product, service, or asset to compete with the other party's 
(acquiring person or acquired entity as appropriate) products or 
services, or as an input for a product or service that competes or 
is intended to compete with the other party's products or services. 
For each such customer, provide contact information (including 
title, phone, and email) and a description of the acquiring person's 
or acquired entity's (as appropriate) supply or licensing agreement 
(or other comparable terms of supply).
    Related Purchases: List and describe each product, service, or 
asset (including data) that the acquiring person or acquired entity 
(as appropriate) incorporates as an input into any product or 
service and that the acquiring person or acquired entity (as 
appropriate) has purchased, licensed, or otherwise obtained in the 
last two years (1) from the other party (acquiring person or 
acquired entity as appropriate) or (2) from any other business that, 
to the filing person's knowledge or belief, competes with the other 
party to provide a substantially similar product, service, or asset.
    For each product, service, or asset listed, provide:
    1. The purchased amount (in units and dollars and any other 
appropriate measure) for each of the last two fiscal years, 
separately for (1) the other party and (2) any other business that, 
to the filing person's

[[Page 42215]]

knowledge or belief, competes with the other party to provide a 
substantially similar product, service, or asset.
    2. The top 10 suppliers (as measured in both units and dollars) 
for the associated input product, service, or asset, with contact 
information (including title, phone, and email) and a description of 
the acquiring person's or acquired entity's (as appropriate) 
purchase or licensing agreement (or other comparable terms of 
purchase).

Labor Markets Information

    This section requests information about the largest categories 
of workers employed by the acquiring person or acquired entity (as 
appropriate) and the geographic area(s) where these employees work.

Largest Employee Classifications

    Provide the aggregate number of employees of the acquiring 
person or acquired entity (as appropriate) for each of the five 
largest occupational categories (as categorized by the first six 
digits of the relevant SOC classifications).

Geographic Market Information for Each Overlapping Employee 
Classification

    Indicate the five largest 6-digit SOC codes in which both 
parties (the acquiring person and the acquired entity) employ 
workers. For each overlapping 6-digit SOC code, list each ERS 
commuting zone in which both parties employ workers with the 6-digit 
classification and provide the aggregate number of classified 
employees in each ERS commuting zone.

Worker and Workplace Safety Information

    Identify any penalties or findings issued against the filing 
person by the U.S. Department of Labor's Wage and Hour Division 
(WHD), the National Labor Relations Board (NLRB), or the 
Occupational Safety and Health Administration (OSHA) in the last 
five years and/or any pending WHD, NLRB, or OSHA matters.
    For each identified penalty or finding, provide (1) the decision 
or issuance date, (2) the case number, (3) the JD number (for NLRB 
only), and (4) a description of the penalty and/or finding.

NAICS Codes

    This item requests information regarding the industry categories 
of the acquiring person or acquired entity(s) or assets (as 
appropriate) of products and services that derived revenue in the 
last fiscal year, as well as for products or services in development 
that would create overlaps with the other party (acquiring person or 
acquired entity as appropriate).

NAICS Codes Describing U.S. Operations With Estimates of Revenue

Acquiring Person

    Identify all 6-digit NAICS industry codes that describe the U.S. 
operations of the acquiring person, inclusive of all entities 
included within the acquiring person at the time the filing is made.
    Responses must be organized by NAICS code in ascending order. 
For each code, provide the name of the operating entity(s) that 
derive(s) revenue in that code and the estimated revenue range: less 
than $10 million; $10 million or more but less than $100 million; 
$100 million or more but less than $1 billion; or $1 billion or 
more. Identify each 6-digit NAICS code in which both the acquiring 
person and acquired entity(s) or assets derive revenue.
    For products and services that derived revenue in the most 
recent fiscal year in a non-manufacturing NAICS code, if the revenue 
is estimated at less than one million dollars, that code may be 
omitted so long as the code does not overlap with a code in which 
the acquired entity(s) or assets derived revenue from U.S. 
operations.
    Acquiring persons should also list all NAICS codes for products 
or services under development by the acquiring person that would 
overlap with the products or services of the acquired entity(s) or 
assets, inclusive of products or services that are known to be under 
development by the acquired entity(s) or assets. NAICS codes that 
reflect only these pipeline products or services should be 
identified as ``pre-revenue.''
    If more than one NAICS code describes the same operations of the 
acquiring person, list each code, and provide an estimate of 
revenue, as described above. End notes may be used to clarify the 
selection of codes or potential overlaps.

Acquired Person

    Identify all 6-digit NAICS industry codes that describe the U.S. 
operations of the acquired entity(s) or assets, inclusive of all 
entities and assets anticipated to be included within the acquired 
entity(s) or assets at the time the transaction will be consummated.
    Responses must be organized by NAICS code in ascending order. 
For each code, provide the name of the operating entity(s) that 
derive(s) revenue in that code and the estimated revenue range: less 
than $10 million; $10 million or more but less than $100 million; 
$100 million or more, but less than $1 billion; or $1 billion or 
more. Identify each 6-digit NAICS code in which both the acquiring 
person and acquired entity(s) or assets derive revenue.
    For products and services that derived revenue in the most 
recent fiscal year in a non-manufacturing NAICS code, if the revenue 
is estimated at less than one million dollars, that code may be 
omitted so long as the code does not overlap with a code in which 
the acquiring person derived revenue from U.S. operations.
    Acquired persons should also list all NAICS codes for products 
or services under development by the acquired entity(s) or assets 
and expected to have annual revenue greater than $1 million within 
two years. NAICS codes that reflect only these pipeline products or 
services should be identified as ``pre-revenue.''
    If more than one NAICS code describes the same operations of the 
acquired entity(s) or assets, list each code, and provide an 
estimate of revenue, as described above. End notes may be used to 
clarify the selection of codes or potential overlaps.

No Revenue

    If there is no revenue to report, explain why.

Controlled-Entity Overlaps

    If, to the knowledge or belief of the person filing 
notification, the acquiring person, or any associate (see Sec.  
801.1(d)(2)) of the acquiring person, derived any amount of dollar 
revenues in the most recent year from operations:
    1. In industries within any 6-digit NAICS industry code in which 
any acquired entity also derived any amount of dollar revenues in 
the most recent year; or
    2. In which a joint venture corporation or unincorporated entity 
will derive dollar revenues;

then for each such 6-digit NAICS industry code follow the 
instructions below for this section.
    Note that if the acquired entity is a joint venture, the only 
overlaps that should be reported are those between the assets to be 
held by the joint venture and any assets of the acquiring person or 
its associates not contributed to the joint venture.
    If the acquiring person reports an associate overlap only, the 
acquired person does not need to respond to this section.

NAICS Overlaps of Controlled Entities

Acquiring Person

    List the name of each entity within the acquiring person or 
associate of the acquiring person, that has U.S, operations in the 
same code as an acquired entity or assets. For each such entity, 
list the name(s) by which the entity does or has within the last 3 
years done business, whether the listed entity is controlled by the 
filing person or an associate of the filing person, the overlapping 
NAICS code(s), NAICS description(s), and provide the appropriate 
Geographic Market Information, based upon the NAICS code. Organize 
responses by NAICS code.

Acquired Person

    List the name of each entity within the acquired entity that has 
U.S. operations in the same code as the acquiring person. For each 
such entity, list the name(s) by which the entity does or has within 
the last 3 years done business, the overlapping NAICS code(s), NAICS 
description(s), and provide the appropriate Geographic Market 
Information, based upon the NAICS code. Organize responses by NAICS 
code.

Geographic Market Information

    For each identified overlapping NAICS code, provide geographic 
information, as described below. Use the 2-digit postal codes for 
states and territories and provide the total number of states and 
territories at the end of the response.
    Except in the case of those NAICS industries in the sectors, 
subsectors, and codes that require street-address level reporting, 
the person filing notification may respond with the word 
``national'' if business is conducted in all 50 states.

State-Level Reporting

Manufacturing Industries

    For each 6-digit NAICS code within the industry sector, 
subsector, or code listed below, list the states in which, to the 
knowledge or belief of the person filing the notification, the 
products in that 6-digit

[[Page 42216]]

NAICS industry code produced by the person filing notification are 
sold without a significant change in their form (whether they are 
sold by the person filing notification or by others to whom such 
products have been sold or resold).

31**** through 33**** Manufacturing, except:
    3115** Dairy Product Manufacturing
    311611 Animal (except Poultry) Slaughtering
    311613 Rendering and Meat Byproduct Processing
    311615 Poultry Processing
    31181* Bread and Bakery Product Manufacturing
    321*** Wood Product Manufacturing
    32221* Paperboard Container Manufacturing
    324*** Petroleum and Coal Products Manufacturing
    3251** Basic Chemical Manufacturing
    325521 Plastics Materials and Resin Manufacturing
    3271** Clay Product and Refractory Manufacturing
    3272** Glass and Glass Product Manufacturing
    3273** Cement and Concrete Product Manufacturing

Wholesale Trade

    For each 6-digit NAICS code within the industry sector, 
subsector, or code listed below, list the states or, if desired, 
portions thereof in which the customers of the person filing 
notification are located.

42**** Wholesale Trade, except:
    42331* Lumber, Plywood, Millwork, and Wood Panel Merchant 
Wholesalers
    42333* Roofing, Siding, and Insulation Material Merchant 
Wholesalers
    42344* Other Commercial Equipment Merchant Wholesalers
    42345* Medical, Dental, and Hospital Equipment and Supplies 
Merchant Wholesalers
    42346* Ophthalmic Goods Merchant Wholesalers
    42349* Other Professional Equipment and Supplies Merchant 
Wholesalers
    4239** Miscellaneous Durable Goods Merchant Wholesalers
    4241** Paper and Paper Product Merchant Wholesalers
    4242** Drug and Druggists' Sundries Merchant Wholesalers
    42441* General Line Grocery Merchant Wholesalers
    42442* Packaged Frozen Food Merchant Wholesalers
    42451* Grain and Field Bean Merchant Wholesalers
    42452* Livestock Merchant Wholesalers
    4247** Petroleum and Petroleum Products Merchant Wholesalers
    4248** Beer, Wine, and Distilled Alcoholic Beverage Merchant 
Wholesalers
    42491* Farm Supplies Merchant Wholesalers
    42495* Paint, Varnish, and Supplies Merchant Wholesalers

Insurance Carriers

    For the 6-digit NAICS code within the industry subsector listed 
below, list the state(s) in which the person filing notification is 
licensed to write insurance.

5241** Insurance Carriers

Other NAICS Sectors

    For each 6-digit NAICS code within the industry sector, 
subsector, or code listed below, list the states or, if desired, 
portions thereof in which the person filing notification conducts 
such operations.

11**** Agriculture, Forestry, Fishing, and Hunting, except:
    113*** Forestry and Logging
21**** Mining, Quarrying, and Oil and Gas Extraction, except:
    2123** Nonmetallic Mineral Mining and Quarrying
2213** Water, Sewage, and Other Systems
23**** Construction
44912* Home Furnishing Retailers
4492** Electronics and Appliance Retailers
48**** and 49**** Transportation and Warehousing, except:
    493*** Warehousing and Storage
51**** Information, except:
    512*** Motion Picture and Sound Recording Industries
5222** Nondepository Credit Intermediation
523*** Securities, Commodity Contracts, and Other Financial 
Investments and Related Activities
5242** Agencies, Brokerages, and Other Insurance Related Activities
525*** Funds, Trusts, and Other Financial Vehicles
531*** Real Estate
533*** Lessors of Nonfinancial Intangible Assets (Except Copyrighted 
Works)
54**** Professional, Scientific and Technical Services, except:
    54138* Testing Laboratories and Services
    54194* Veterinary Services
55**** Management of Companies and Enterprises
561*** Administrative and Support Services
61**** Educational Services
71**** Arts, Entertainment, and Recreation, except:
    7132** Gambling Industries
    71394* Fitness and Recreational Sports Centers
7212** RV (Recreational Vehicle) Parks and Recreational Camps
7213** Rooming and Boarding Houses, Dormitories, and Workers' Camps
8114** Personal and Household Goods Repair and Maintenance
813*** Religious, Grantmaking, Civic, Professional, and Similar 
Organizations
814*** Private Households

Street-Level Reporting

    For each 6-digit NAICS code within the industry sector, 
subsector, or code listed below, provide the street address, 
arranged by state, county and city or town, and latitude and 
longitude (each in degrees up to at least five decimal places) of 
each establishment from which dollar revenues were derived (either 
directly or by a franchisee) in the most recent year by the person 
filing notification.

113*** Forestry and Logging
2123** Nonmetallic Mineral Mining and Quarrying
22**** Utilities, except:
    2213** Water, Sewage and Other Systems
3115** Dairy Product Manufacturing
311611 Animal (except Poultry) Slaughtering
311613 Rendering and Meat Byproduct Processing
311615 Poultry Processing
31181* Bread and Bakery Product Manufacturing
321*** Wood Product Manufacturing
32221* Paperboard Container Manufacturing
324*** Petroleum and Coal Products Manufacturing
3251** Basic Chemical Manufacturing
325521 Plastics Materials and Resin Manufacturing
3271** Clay Product and Refractory Manufacturing
3272** Glass and Glass Product Manufacturing
3273** Cement and Concrete Product Manufacturing
42331* Lumber, Plywood, Millwork, and Wood Panel Merchant 
Wholesalers
42333* Roofing, Siding, and Insulation Material Merchant Wholesalers
42344* Other Commercial Equipment Merchant Wholesalers
42345* Medical, Dental, and Hospital Equipment and Supplies Merchant 
Wholesalers
42346* Ophthalmic Goods Merchant Wholesalers
42349* Other Professional Equipment and Supplies Merchant 
Wholesalers
4239** Miscellaneous Durable Goods Merchant Wholesalers
4241** Paper and Paper Product Merchant Wholesalers
4242** Drug and Druggists' Sundries Merchant Wholesalers
42441* General Line Grocery Merchant Wholesalers
42442* Packaged Frozen Food Merchant Wholesalers
42451* Grain and Field Bean Merchant Wholesalers
42452* Livestock Merchant Wholesalers
4247** Petroleum and Petroleum Products Merchant Wholesalers
4248** Beer, Wine, and Distilled Alcoholic Beverage Merchant 
Wholesalers
42491* Farm Supplies Merchant Wholesalers
42495* Paint, Varnish, and Supplies Merchant Wholesalers
44**** and 45**** Retail Trade, except:
    44912* Home Furnishings Retailers
    4492** Electronics and Appliance Retailers
493*** Warehousing and Storage
512*** Motion Picture and Sound Recording Industries
521*** Monetary Authorities--Central Bank
5221** Depository Credit Intermediation
5223** Activities Related to Credit Intermediation
532*** Rental and Leasing Services
54138* Testing Laboratories and Services
54194* Veterinary Services
562*** Waste Management and Remediation Services
62**** Health Care and Social Assistance

[[Page 42217]]

7132** Gambling Industries
71394* Fitness and Recreational Sports Centers
72**** Accommodation and Food Services, except:
    7212** RV (Recreational Vehicle) Parks and Recreational Camps
    7213** Rooming and Boarding Houses, Dormitories, and Workers' 
Camps
811*** Repair and Maintenance, except
    8114** Personal and Household Goods Repair and Maintenance
812*** Personal and Laundry Services

Minority-Held Entity Overlaps

    This section requires the disclosure of holdings of 5% or more 
but less than 50% of certain entities that derive dollar revenues in 
any 6-digit NAICS code reported by the other person filing 
notification. Holdings in those entities that have total assets of 
less than $10 million may be omitted.
    If NAICS codes are unavailable, holdings in entities that have 
operations in the same industry, based on the knowledge or belief of 
the filing person, should be listed. Holdings in those entities that 
have total assets of less than $10 million may be omitted.

Minority Holdings of Acquiring Person and Its Associates

    If the acquiring person holds 5% or more but less than 50% of 
the voting securities of any issuer or non-corporate interests of 
any unincorporated entity that derived dollar revenues in the most 
recent year from operations in industries within any 6-digit NAICS 
code(s) reported by the acquired entity(s) or assets, provide such 
6-digit NAICS code(s), the entity within the acquiring person that 
holds the minority interests, the name and d/b/a names (if known) of 
the minority held-entity, and percentage of voting securities or 
non-corporate interests held.
    Additionally, based on the knowledge or belief of the acquiring 
person, for each associate (see Sec.  801.1(d)(2)) of the acquiring 
person holding:
    1. 5% or more but less than 50% of the voting securities or non-
corporate interests of an acquired entity; and/or
    2. 5% or more but less than 50% of the voting securities of any 
issuer or non-corporate interests of any unincorporated entity that 
derived dollar revenues in the most recent year from operations in 
industries within any 6-digit NAICS industry code in which the 
acquired entity(s) or assets also derived dollar revenues in the 
most recent year,

list the associate, the name and d/b/a names (if known) of the 
minority-held entity, and percentage of voting securities or non-
corporate interests held.
    Responses should be organized alphabetically by the name of the 
entity in which minority interests are held.
    The acquiring person may rely on its regularly prepared 
financials that list its investments, and those of its associates 
that list their investments, provided the financials are no more 
than three months old.

Minority Holdings of the Acquired Entity

    If an acquired entity holds 5% or more but less than 50% of the 
voting securities of any issuer or non-corporate interests of any 
unincorporated entity that derived dollar revenues in the most 
recent year from operations in industries within any 6-digit NAICS 
industry code(s) reported by the acquiring person, provide such 6-
digit NAICS code(s), the entity within the acquired entity that 
holds the minority interests, the name and d/b/a names (if known) of 
the minority-held entity, and percentage of voting securities or 
non-corporate interests held.
    Responses should be organized alphabetically by the name of the 
entity in which minority interests are held.

Prior Acquisitions

    This item should be completed for the acquiring person and the 
acquired entity, and pertains only to prior acquisitions of U.S. 
entities or assets and foreign entities or assets with sales in or 
into the U.S. that (i) derived revenue in an identified 6-digit 
NAICS industry code overlap or (ii) provided or produced a 
competitive overlap product or service as described in the 
Horizontal Overlap Narrative.
    Identify all such acquisitions of entities or assets made within 
the ten years prior to filing in which (i) 50% or more of the voting 
securities of an issuer, (ii) 50% or more of non-corporate interests 
of an unincorporated entity, or (iii) all or substantially all the 
assets of an operating unit were acquired. Additionally, identify 
all such acquisitions of assets that did not constitute all or 
substantially all of an operating unit but were valued at or above 
the statutory size-of-transaction test at the time of their 
acquisition.
    For each such acquisition, supply:
    1. the 6-digit NAICS code(s) (by number and description) 
identified above in which the acquired entity derived dollar 
revenues, or the competitive overlap product(s) or service(s) 
provided;
    2. the name of the entity from which the voting securities, non-
corporate interests, or assets were acquired;
    3. the headquarters address of that entity prior to the 
acquisition;
    4. whether voting securities, non-corporate interests, or assets 
were acquired;
    5. the consummation date of the acquisition; and
    6. whether all or substantially all of the acquired voting 
securities, non-corporate interests, or assets are still held at the 
time of filing.

Additional Information

Subsidies From Foreign Entities or Governments of Concern

    To the knowledge or belief of the filing person, within the two 
years prior to filing, has the acquiring or acquired person (as 
appropriate) received any subsidy (or a commitment to provide a 
subsidy in the future) from any foreign entity or government of 
concern (see Sec.  801.1(r))? If yes, list each entity or government 
from which such subsidy was received and provide a brief description 
of the subsidy.
    For products the acquiring or acquired person (as appropriate) 
produced in whole or in part in a country that is a covered nation 
under 42 U.S.C. 18741(a)(5)(C), is any product subject to 
countervailing duties imposed by any jurisdiction? If yes, list each 
product, the countervailing duty imposed, and the jurisdiction that 
imposed the duty.
    To the knowledge or belief of the filing person, for products 
the acquiring or acquired person (as appropriate) produced in whole 
or in part in a country that is a covered nation under 42 U.S.C. 
18741(a)(5)(C), is any product the subject of a current 
investigation for countervailing duties in any jurisdiction? If yes, 
list each product and the jurisdiction conducting the investigation.

Defense or Intelligence Contracts

    Identify pending or active procurement contracts with the U.S. 
Department of Defense or any member of the U.S. intelligence 
community, as defined by 10 U.S.C. 101(a)(6) or 50 U.S.C. 3033(4) 
valued at $10 million or more. The acquiring person should limit its 
response to the acquiring entity and any entity within the acquiring 
person that directly or indirectly controls the acquiring entity. 
The acquired person should limit its response to the acquired 
entity(s) and/or assets. Include (1) the name of the entity within 
the filing person (2) the contracting office, as defined by 48 CFR 
2.101(b); (3) the Contracting Office ID; (5) the Award ID; (5) and 
the NAICS code(s), if any, listed in the System for Award Management 
database.

Identification of Communications and Messaging Systems

    List all communications systems or messaging applications on any 
device used by the acquiring or acquired person (as appropriate) 
that could be used to store or transmit information or documents 
related to its business operations.

Other Jurisdictions

Transactions Subject to International Antitrust Notification

    If, to the knowledge or belief of the filing person at the time 
of filing, a non-U.S. antitrust or competition authority has been or 
will be notified of the transaction, list the name of each such 
authority. Identify, to the knowledge or belief of the filing person 
at the time of filing, any jurisdiction where (1) a merger 
notification has been filed, (2) a merger notification is being 
prepared for filing, or (3) the parties have a good faith belief 
that a merger notification will be made, along with the dates of the 
filing or planned filing.

HSR Confidentiality Waiver for International Competition Authorities 
(VOLUNTARY)

    Indicate whether the filing person agrees to waive the 
disclosure exemption contained in the Hart-Scott-Rodino Act, 15 
U.S.C. 18a(h) to permit the DOJ and FTC to disclose to non-U.S. 
competition authority/authorities listed by the filing person below 
(1) the fact that a notification was filed, (2) the waiting period 
associated with the notification, and (3) information and documents 
filed with the notification. This waiver will not cover materials 
provided in response to a request for additional information issued 
pursuant to 15 U.S.C. 18a(e) and does not preclude the filing person 
from providing a full waiver as provided for under FTC and DOJ 
practice as

[[Page 42218]]

reflected in the Model Waiver. The filing person should list the 
jurisdictions to which the waiver applies. This item is voluntary.

HSR Confidentiality Waiver for State Attorneys General (VOLUNTARY)

    Indicate whether the filing person agrees to waive the 
disclosure exemption contained in the Hart-Scott-Rodino Act, 15 
U.S.C. 18a(h) to permit the DOJ and FTC to disclose to State 
Attorneys General listed by the filing person below (1) the fact 
that a notification was filed, (2) the waiting period associated 
with the notification, and (3) information and documents filed with 
the notification. This waiver will not cover materials provided in 
response to a request for additional information issued pursuant to 
15 U.S.C. 18a(e) and does not preclude the filing person from 
providing a full waiver as provided for under FTC and DOJ practice 
as reflected in the Model Waiver. The filing person should list the 
jurisdictions to which the waiver applies. This item is voluntary.

Certification

    See Sec.  803.6 for requirements.
    The certification must be notarized or use the language found in 
28 U.S.C. 1746 relating to unsworn declarations under penalty of 
perjury.

Penalties for False Statements

    Federal law provides criminal penalties, including up to twenty 
years imprisonment, for any person who knowingly alters, destroys, 
mutilates, conceals, covers up, falsifies, or makes a false entry in 
any record, document, or tangible object with the intent to impede, 
obstruct, or influence an ongoing or anticipated federal 
investigation (see, e.g., Section 1519 of Title 18, United States 
Code.). It is also a criminal offense to knowingly make a false 
statement in a federal investigation, obstruct a federal 
investigation, or conspire to obstruct justice or obstruct or impede 
the lawful functioning of the government (see, e.g., Sections 371, 
1001, and 1505 of Title 18, United States Code).

Certification

    This NOTIFICATION AND REPORT FORM, together with any and all 
appendices and attachments thereto, was prepared and assembled under 
my supervision in accordance with instructions issued by the 
Commission. Subject to the recognition that, where so indicated, 
reasonable estimates have been made because books and records do not 
provide the required data, the information is, to the best of my 
knowledge, true, correct, and complete in accordance with the 
statute and rules.
    I acknowledge that the Commission or the Assistant Attorney 
General of the Antitrust Division of the Department of Justice may, 
prior to the expiration of the initial waiting period pursuant to 15 
U.S.C. 18a, require the submission of additional information or 
documentary material relevant to the proposed transaction. I have 
taken the necessary steps to prevent the destruction of documents 
and information related to the proposed transaction before the 
expiration of any waiting period.

Affidavits

    Affidavit(s) required by Sec.  803.5 must be notarized or use 
the language found in 28 U.S.C. 1746 relating to unsworn 
declarations under penalty of perjury. If an entity is filing on 
behalf of the acquiring or acquired person, the affidavit must still 
attest to the good faith of the UPE.
    In non-Sec.  801.30 transactions, the affidavit(s) (submitted by 
both persons filing) must attest that a definitive agreement to 
merge or acquire has been executed, or if a definitive agreement has 
not been executed, that a term sheet or draft agreement that 
describes with specificity the scope of the transaction that will be 
consummated has been submitted. The affidavit(s) must further attest 
to the good faith intention of the person filing notification to 
complete the transaction. (See Sec.  803.5(b)).
    In Sec.  801.30 transactions, the affidavit (submitted only by 
the acquiring person) must attest:
    1. That the issuer whose voting securities or the unincorporated 
entity whose non-corporate interests are to be acquired has received 
notice, as described below, from the acquiring person;
    2. In the case of a tender offer, that the intention to make the 
tender offer has been publicly announced; and
    3. The good faith intention of the person filing notification to 
complete the transaction.
    Acquiring persons in Sec.  801.30 transactions are also required 
to submit a copy of the notice received by the acquired person 
pursuant to Sec.  803.5(a)(3) along with the filing. This notice 
must include:
    1. The identity of the acquiring person and the fact that the 
acquiring person intends to acquire voting securities of the issuer 
or non-corporate interests of the unincorporated entity;
    2. The specific notification threshold that the acquiring person 
intends to meet or exceed in an acquisition of voting securities;
    3. The fact that the acquisition may be subject to the Act, and 
that the acquiring person will file notification under the Act;
    4. The anticipated date of receipt of such notification by the 
Agencies; and
    5. The fact that the person within which the issuer or 
unincorporated entity is included may be required to file 
notification under the Act. (See Sec.  803.5(a)).

Privacy Act Statement

    Section 18a(a) of Title 15 of the U.S. Code authorizes the 
collection of this information. Our authority to collect Social 
Security numbers is 31 U.S.C. 7701. The primary use of information 
submitted on this Form is to determine whether the reported merger 
or acquisition may violate the antitrust laws. Taxpayer information 
is collected, used, and may be shared with other agencies and 
contractors for payment processing, debt collection and reporting 
purposes. Furnishing the information on the Form is voluntary. 
Consummation of an acquisition required to be reported by the 
statute cited above without having provided this information may, 
however, render a person liable to civil penalties up to the amount 
listed in 16 CFR 1.98(a) per day.
    We also may be unable to process the Form unless you provide all 
of the requested information.

Disclosure Notice

    Public reporting burden for this report is estimated to vary 
from 20 to 382 hours per response, with an average of 144 hours per 
response, including time for reviewing instructions, searching 
existing data sources, gathering, and maintaining the data needed, 
and completing and reviewing the collection of information. Send 
comments regarding the burden estimate or any other aspect of this 
report, including suggestions for reducing this burden to:

Premerger Notification Office, Federal Trade Commission, Room #5301, 
400 7th Street SW, Washington, DC 20024

and

Office of Information and Regulatory Affairs, Office of Management 
and Budget, Washington, DC 20503

    Under the Paperwork Reduction Act, as amended, an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number. The operative OMB control number, 3084-0005, appears 
within the Notification and Report Form and these Instructions.

    By the direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2023-13511 Filed 6-28-23; 8:45 am]
BILLING CODE 6750-01-P