[Federal Register Volume 89, Number 24 (Monday, February 5, 2024)]
[Rules and Regulations]
[Pages 7609-7612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02228]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 89, No. 24 / Monday, February 5, 2024 / Rules 
and Regulations  

[[Page 7609]]



FEDERAL TRADE COMMISSION

16 CFR Parts 801 and 803

RIN 3084-AB46


Premerger Notification; Reporting and Waiting Period Requirements

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``Commission'' or ``FTC'') is 
amending the Hart-Scott-Rodino (``HSR'') Premerger Notification Rules 
(``Rules'') that require the parties to certain mergers and 
acquisitions to file reports with the FTC and the Assistant Attorney 
General in charge of the Antitrust Division of the Department of 
Justice (``the Assistant Attorney General'') (together the ``Antitrust 
Agencies'' or ``Agencies'') and to wait a specified period of time 
before consummating such transactions. In a separate document published 
elsewhere in this issue of the Federal Register, the Commission is 
announcing the annual adjustment of the filing fee thresholds and 
amounts required by the Merger Filing Fee Modernization Act of 2022 
(``2022 Amendments''), contained within the Consolidated Appropriations 
Act, 2023. In this document, the Commission amends Parts 801 and 803 of 
the Rules to make the ministerial changes required to reflect the 
annual adjustment of the filing fee thresholds and amounts required by 
the 2022 Amendments.

DATES: Effective March 6, 2024.

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, Email: [email protected].

SUPPLEMENTARY INFORMATION:

Introduction

    Section 7A of the Clayton Act (the ``Act'') requires the parties to 
certain mergers or acquisitions to file with the Commission and the 
Assistant Attorney General and wait a specified period before 
consummating the proposed transaction to allow the Antitrust Agencies 
to conduct their initial review of a proposed transaction's competitive 
impact. The reporting requirement and the waiting period that it 
triggers are intended to enable the Agencies to determine whether a 
proposed merger or acquisition may violate the antitrust laws if 
consummated and, when appropriate, to seek a preliminary injunction in 
federal court to prevent consummation.
    Section 7A(d)(1) of the 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. Section 7A(d)(2) of the 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 and prescribe such other 
rules as may be necessary and appropriate to carry out the purposes of 
section 7A of the Act. Pursuant to that authority, the Commission, with 
the concurrence of the Assistant Attorney General, developed the Rules, 
codified in 16 CFR parts 801, 802 and 803, and the appendices to Part 
803, the Notification and Report Form for Certain Mergers and 
Acquisitions (``HSR Form'') and Instructions to the Notification and 
Report Form for Certain Mergers and Acquisitions (``Instructions''), to 
govern the form of premerger notification to be provided by merging 
parties.
    In this rulemaking, the Commission is amending Parts 801 and 803 of 
the Rules to make the ministerial changes required to reflect the 
annual adjustment of the filing fee thresholds and amounts required by 
the 2022 Amendments.

Affected in Part 801, Coverage Rules:
    Sec.  801.1 Definitions.
Affected in Part 803, Transmittal Rules
     Sec.  803.9 Filing fee.
     Appendix A to Part 803--Notification and Report Form for 
Certain Mergers and Acquisitions

Background

    In 1989, section 605 of Public Law 101-162, 103 Stat. 1031 (15 
U.S.C. 18a note), first required the Federal Trade Commission to assess 
and collect filing fees from persons acquiring voting securities or 
assets under the Act. The fee was originally $20,000 and was raised 
twice so that by 1994 it was $45,000. In 2000, fee tiers, rather than a 
single fee, were established by section 630(b) of Public Law 106-553, 
114 Stat. 2762, 2762A-109 so that filers were required to pay $45,000, 
$125,000, or $280,000 per transaction, depending on the total value of 
the transaction. While these fees did not change after their adoption 
in 2000, the relevant jurisdictional thresholds began to adjust 
annually in 2005 to reflect changes in the gross national product 
(``GNP'').\1\ This meant that the value of reportable transactions 
started to increase but the associated filing fees did not.
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    \1\ See Public Law 106-553, 114 Stat. at 2762A-109 to -110, 
amending Section 605 of title VI of Public Law 101-162 (15 U.S.C. 
18a note).
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    On December 29, 2022, the President signed into law the 
Consolidated Appropriations Act, 2023, which included the 2022 
Amendments. The 2022 Amendments, among other things, aimed to address 
the disparity between the value of a transaction and its associated 
filing fee by amending the fees and fee tiers in the Act. See Public 
Law 117-328, Div. GG, 136 Stat. 4459. The fee structure enacted by the 
2022 Amendments codifies six, rather than three, filing fee tiers. In 
addition, the 2022 Amendments require that the filing fee tiers be 
adjusted annually to reflect changes in the GNP for the previous year 
\2\ and that the filing fee amounts be increased annually, if the 
percentage increase in the consumer price index (``CPI'') for the prior 
year as compared to the CPI for the fiscal year ended on September 30, 
2022, is greater than one percent.\3\ The 2022 Amendments specify that 
such adjustments to the fees will be rounded to the nearest $5,000.
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    \2\ Public Law 117-328, 136 Stat. 4459, Div. GG, Title I.
    \3\ Id.

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[[Page 7610]]

    In a separate document published elsewhere in this issue of the 
Federal Register, the Commission is announcing (1) the revised 
jurisdictional thresholds for the Hart Scott Rodino Antitrust 
Improvements Act of 1976 required by the 2000 amendment of Section 7A 
of the Clayton Act; and (2) the revised filing fee schedule for the 
same Act required by Division GG of the 2023 Consolidated 
Appropriations Act. In the instant document, the Commission, with the 
concurrence of the Assistant Attorney General, amends Parts 801 and 803 
of the Rules to make the ministerial changes required to reflect the 
annual adjustment of the filing fee thresholds and amounts required by 
the 2022 Amendments.

I. Section 801.1 Definitions

Section 801.1(n), Definition of (as Adjusted)

    The Commission is making a ministerial change to the definition of 
``(as adjusted)'' to clarify that the fee thresholds and amounts are 
subject to annual adjustment under the 2022 Amendments. The Commission 
is not making any material changes to this section.

II. Section 803.9 Filing Fee

    Section 803.9 describes how fees are determined and paid. The 
Commission is amending the eight examples in Sec.  803.9 to conform 
with the changes to the fees and fee tiers required by the 2022 
Amendments, to update dates and dollar values to reflect more recent 
adjusted jurisdictional thresholds, and to add clarity to the examples. 
Specifically, the Commission will amend the examples in Sec.  803.9 as 
follows:
     Revising Example 1 to add ``(as adjusted)'' to reflect the 
annual adjustment of the fee amounts as codified in the 2022 
Amendments.
     Revising Example 2 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and adjust example 
dollar values to align with values in effect as of April 2024 to avoid 
confusion and improve the utility of the example.
     Revising Example 3 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and adjust example 
dollar values to align with values in effect as of April 2024 to avoid 
confusion and improve the utility of the example.
     Revising Example 4 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and adjust example 
dollar values to align with values in effect as of April 2024 to avoid 
confusion and improve the utility of the example.
     Revising Example 5 to provide real (and not adjusted) 
asset values to avoid confusion and improve the utility of the example, 
and to add ``(as adjusted)'' to reflect the annual adjustment of the 
fee amounts as codified in the 2024 Amendments.
     Revising Example 6 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and adjust example 
dollar values to align with values in effect as of April 2024 to avoid 
confusion, improve the utility of the example, and eliminate a 
typographical error.
     Revising Example 7 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and adjust example 
dollar values to align with values in effect as of April 2024 to avoid 
confusion, improve the utility of the example, and eliminate a 
typographical error.
     Revising Example 8 to clarify that the tiers and amounts 
referenced are those in effect as of April 2024 and add ``(as 
adjusted)'' to reflect the annual adjustment of the fee amounts as 
codified in the 2022 Amendments.

III. Administrative Procedure Act

    The Commission finds good cause to adopt these changes without 
prior public comment. Under the Administrative Procedure Act (``APA''), 
notice and comment are not required ``when the agency for good cause 
finds (and incorporates the finding and a brief statement of reasons 
therefore in the rules issued) that notice and public procedure thereon 
are impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. 553(b)(3)(B).
    In this case, the Commission finds that public comment on these 
changes is unnecessary. The Commission is amending the HSR Rules to 
conform with the new fee tiers and fees enacted by Congress. These 
updates do not involve any substantive changes in the HSR Rules' 
requirements for entities subject to the Rules. Rather, they are 
conforming updates to the definition of the HSR Act and examples of how 
to calculate the appropriate fee. In addition, these amendments fall 
within the category of rules covering agency procedure and practice 
that are exempt from the notice-and-comment requirements of the APA. 
See 5 U.S.C. 553(b)(3)(A).
    For these reasons, the Commission finds there is good cause for 
adopting this final rule as effective on March 6, 2024 without prior 
public comment.

IV. 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 
businesses, except where the agency head 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 businesses. Indeed, 
amendments to the Act in 2001 were intended to reduce the burden of the 
premerger notification program further by exempting all transactions 
valued at less than $50 million (as adjusted annually).\4\ Likewise, 
none of the rule amendments expand the coverage of the premerger 
notification rules in a way that would affect small business. In 
addition, the Regulatory Flexibility Act requirements apply only to 
rules or amendments that are subject to the notice-and-comment 
requirements of the APA. See 5 U.S.C. 603, 604. Because these 
amendments are exempt from those APA requirements, as noted earlier, 
they are also exempt from the Regulatory Flexibility Act requirements. 
In any event, to the extent, if any, that the Regulatory Flexibility 
Act applies, the Commission certifies that these rules will not have a 
significant economic impact on a substantial number of small entities. 
This document serves as notice of this certification to the Small 
Business Administration.
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    \4\ By comparison, the dollar thresholds established for total 
annual receipts of a small business under the applicable small 
business size standards fall well under $50 million. See 13 CFR 
121.201.
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V. Paperwork Reduction Act

    The Commission has existing Paperwork Reduction Act clearance for 
the HSR Rules (OMB Control Number 3084-0005). The Commission has 
concluded that these technical amendments do not change the substance 
or frequency of the pre-existing information collection requirements 
and, therefore, do not require further OMB clearance.

VI. Other Matters

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

List of Subjects in 16 CFR Parts 801 and 803

    Antitrust.


[[Page 7611]]


    For the reasons stated in the preamble, the Federal Trade 
Commission is 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 revising paragraph (n) to read as follows:


Sec.  801.1  Definitions

* * * * *
    (n) (as adjusted). The parenthetical ``(as adjusted)'' refers to 
the adjusted values published in the Federal Register document titled 
``Revised Jurisdictional Thresholds and Fee Amounts under Section 7A of 
the Clayton Act.'' This Federal Register document will be published in 
January of each year and the values contained therein will be effective 
as of the effective date published in the Federal Register document and 
will remain effective until superseded in the next calendar year. The 
document will also be available at https://www.ftc.gov. Such adjusted 
values will be calculated in accordance with Section 7A(a)(2)(A) and 
the statutory note to Section 7A.
* * * * *

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. Revise Sec.  803.9 (a)(1) through (8) as follows:


Sec.  803.9  Filing fee.

    (a) * * * * *
    (1) ``A'' wishes to acquire voting securities issued by B, where 
the greater of the acquisition price and the market price is in excess 
of $50 million (as adjusted) but less than $100 million (as adjusted) 
pursuant to Sec.  801.10 of this chapter. When ``A'' files notification 
for the transaction, it must indicate the $50 million (as adjusted) 
threshold. If the value of the voting securities is less than $161.5 
million (as adjusted), ``A'' must pay a filing fee of $30,000 (as 
adjusted) because the aggregate total amount of the acquisition is 
greater than $50 million (as adjusted) but less than $161.5 million (as 
adjusted). If the aggregate total value of the voting securities is at 
least $161.5 million (as adjusted), but less than $500 million (as 
adjusted), ``A'' must pay a filing fee of $100,000 (as adjusted).
    (2) In April 2024, ``A'' acquires $75 million of assets from ``B.'' 
The parties meet the size of person criteria of section 7A(a)(2)(B) of 
the act, but the transaction is not reportable because it does not 
exceed the $50 million (as adjusted) size of transaction threshold of 
that provision. Two months later ``A'' acquires additional assets from 
``B'' valued at $175 million. Pursuant to the aggregation requirements 
of Sec.  801.13(b)(2)(ii) of this chapter, the aggregate total amount 
of ``B's'' assets that ``A'' will hold as a result of the second 
acquisition is $250 million. Accordingly, when ``A'' files notification 
for the second transaction, ``A'' must pay a filing fee of $100,000 (as 
adjusted) because the aggregate total amount of the acquisition is less 
than $500 million (as adjusted), but not less than $161.5 million (as 
adjusted).
    (3) In April 2024, ``A'' acquires $120 million of voting securities 
issued by B after submitting its notification and $30,000 (as adjusted) 
filing fee and indicates the $50 million (as adjusted) threshold. Later 
in 2024, ``A'' files to acquire additional voting securities issued by 
B valued at $120 million because it will exceed the next higher 
reporting threshold (see Sec.  801.1(h) of this chapter). Assuming the 
second transaction is reportable, and the value of its initial holdings 
is unchanged (see Sec. Sec.  801.13(a)(2) and 801.10(c) of this 
chapter), the provisions of Sec.  801.13(a)(1) of this chapter require 
that ``A'' report that the total value of the second transaction is 
$240 million, which is in excess of $100 million (as adjusted) 
notification threshold. This is because ``A'' must aggregate previously 
acquired securities in calculating the value of B's voting securities 
that it will hold as a result of the second acquisition. ``A'' should 
pay a filing fee of $100,000 (as adjusted) because the total value is 
greater than $161.5 million (as adjusted) but less than $500 million 
(as adjusted).
    (4) In April 2024, ``A'' signs a contract with a stated purchase 
price of $174 million, subject to adjustments, to acquire all of the 
assets of ``B.'' If the amount of adjustments can be reasonably 
estimated, the acquisition price--as adjusted to reflect that 
estimate--is determined. If the amount of adjustments cannot be 
reasonably estimated, the acquisition price is undetermined. In either 
case the board or its delegee must also determine in good faith the 
fair market value. (Sec.  801.10(b) of this chapter states that the 
value of an asset acquisition is to be the fair market value or the 
acquisition price, if determined and greater than fair market value.) 
``A'' files notification and submits a $30,000 (as adjusted) filing 
fee. ``A's'' decision to pay that fee may be justified on either of two 
bases. First, ``A'' may have concluded that the acquisition price can 
be reasonably estimated to be less than $173.3 million, because of 
anticipated adjustments--e.g., based on due diligence by ``A's'' 
accounting firm indicating that one third of the inventory is not 
saleable. If fair market value is also determined in good faith to be 
less than $173.3 million, the $30,000 (as adjusted) fee is appropriate. 
Alternatively, ``A'' may conclude that because the adjustments cannot 
reasonably be estimated, the acquisition price is undetermined. If so, 
``A'' would base the valuation on the good faith determination of fair 
market value. The acquiring party's execution of the Certification also 
attests to the good faith valuation of the value of the transaction.
    (5) In April 2024, ``A'' contracts to acquire all of the assets of 
``B'' for $550 million. The assets include hotels, office buildings, 
and rental retail property, all of which are exempted by Sec.  802.2 of 
this chapter. Section 802.2 directs that these assets--which are valued 
at $300 million--are exempt from the requirements of the act and that 
reporting requirements for the transaction should be determined by 
analyzing the remainder of the acquisition as if it were a separate 
transaction. Furthermore, Sec.  801.15(a)(2) of this chapter states 
that those exempt assets are never held as a result of the acquisition. 
Accordingly, the aggregate amount of the transaction is in excess of 
$161.5 million (as adjusted), but less than $500 million (as adjusted). 
``A'' will be liable for a filing fee of $100,000 (as adjusted), rather 
than $250,000 (as adjusted), because the value of the transaction is 
not less than $161.5 million (adjusted) but is less than $500 million 
(as adjusted).
    (6) In April 2024, ``A'' acquires coal reserves from ``B'' valued 
at $150 million. No notification or filing fee is required because the 
acquisition is exempted by Sec.  802.3(b) of this chapter. Three months 
later, A proposes to acquire additional coal reserves from ``B'' valued 
at $500 million. This transaction is subject to the notification 
requirements of the act because the value of the acquisition exceeds 
the $200 million limitation on the exemption in Sec.  802.3(b). As a 
result of Sec.  801.13(b)(2)(ii) of this chapter, the prior $150 
million acquisition must be added because the additional $500 million 
of coal reserves were acquired from the same person within 180 days of 
the initial acquisition. Because aggregating the two acquisitions 
exceeds the $200 million exemption limitation, Sec.  801.15(b) of this 
chapter directs that ``A'' will also hold the previously

[[Page 7612]]

exempt $150 million acquisition; thus, the aggregate amount held as a 
result of the $500 million acquisition is $650 million. Accordingly, 
``A'' must file notification to acquire the coal reserves valued in 
excess of $500 million (as adjusted) but less than $1 billion (as 
adjusted) and pay a filing fee of $250,000 (as adjusted).
    (7) In April 2024, ``A'' intends to acquire 20 percent of the 
voting securities of B, a non-publicly traded issuer. The agreed upon 
acquisition price is $172.3 million subject to post-closing adjustments 
of up to plus or minus $2 million. ``A'' estimates that the adjustments 
will be minus $1 million. In this example, since ``A'' is able in good 
faith to reasonably estimate the adjustments to the agreed-on price, 
the acquisition price is deemed to be determined and the appropriate 
filing fee threshold is $50 million (as adjusted). Even if the post-
closing adjustments cause the final price actually paid to exceed 
$172.3 million, ``A'' would be deemed to hold $171.3 million in B 
voting securities as a result of this acquisition. Note, that any 
additional acquisition by ``A'' of B voting may trigger another filing 
and require the appropriate fee.
    (8) In April 2024, ``A'' intends to make a cash tender offer for a 
minimum of 50 percent plus one share of the voting securities of B, a 
non-publicly traded issuer, but will accept up to 100 percent of the 
shares if they are tendered. There are 12 million shares of B voting 
stock outstanding and the tender offer price is $100 per share. In this 
instance, since there is no cap on the number of shares that can be 
tendered, the value of the transaction will be the value of 100 percent 
of B's voting securities, and ``A'' must pay the $400,000 (as adjusted) 
fee for the $1 billion (as adjusted) filing fee threshold. Note that if 
the tender offer had been for a maximum of 50 percent plus one share 
the value of the transaction would be $600 million, and the appropriate 
fee would be $250,000 (as adjusted), based on the $500 million (as 
adjusted) filing fee threshold. This would be true even if the tender 
offer were to be followed by a merger which would be exempt under 
section 7A(c)(3) of the act.
* * * * *

    By direction of the Commission.
Joel Christie,
Acting Secretary.
[FR Doc. 2024-02228 Filed 2-2-24; 8:45 am]
BILLING CODE 6750-01-P