Notification and Report Form for Certain Mergers and Acquisitions Under the Antitrust Improvements Act

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40704 Federal Register / Vol. 60, No. 153 / Wednesday, August 9, 1995 / Rules and Regulations FEDERAL TRADE COMMISSION 16 CFR Parts 800 and 803 Notification and Report Form for Certain Mergers and Acquisitions Under the Antitrust Improvements Act AGENCY: Federal Trade Commission. ACTION: Final rule.

SUMMARY: This final rule revises 16 CFR part 803 Appendix, the Antitrust Improvements Act Notification and Report Form for Certain Mergers and Acquisitions (the ‘‘Form’’). The Form must be completed and submitted by persons required to report mergers or acquisitions pursuant to Section 7A of the Clayton Act as added by title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (‘‘HSR Act’’). The revised Form will require that 1992 revenue data, identified by 1987 Bureau of the Census Standard Industrial Classification (SIC) Codes, be provided in response to certain items on the Form that previously called for 1987 data. This final rule also removes 16 CFR part 800, the Transitional Rule addressing the treatment of acquisitions consummated before, and notifications filed on or before, September 5, 1978, the effective date of the Form and the rules implementing the HSR Act (‘‘the Rules’’).

EFFECTIVE DATE: August 9, 1995. ADDRESSES: All completed Forms, including any documents required to be submitted in response to any item on the Form, must be delivered to: Premerger Notification Office, Bureau of Competition, Room 303, Federal Trade Commission, Washington, DC 20580, and Director of Operations, Antitrust Division, Room 3218, Department of Justice, Washington, DC 20530, as specified by 16 CFR 803.10(c). FOR FURTHER INFORMATION CONTACT: William I. Schechter, Attorney, or Melea R. Epps, Attorney, Premerger Notification Office, Bureau of Competition, Room 303, Federal Trade Commission, Washington, DC 20580. Telephone (202) 326–3100. SUPPLEMENTARY INFORMATION: Paperwork Reduction Act This change to the Form has been approved by the Office of Information and Regulatory Affairs, Office of Management and Budget, under the existing OMB clearance, Control No. 3084–0005.

Regulatory Flexibility Act The Federal Trade Commission (‘‘the Commission’’) has previously certified that the Permerger Notification Rules and Report Form do not significantly affect small businesses. The revision to the Form made by this notice will not change the premerger notification rules in any way that would affect that determination. Therefore, pursuant to 5 U.S.C. 605(b), as added by the Regulatory Flexibility Act, Public Law 96–354 (September 19, 1980), the Commission certifies that these rules will not have a significant economic impact on a substantial number of small entities. Section 604 of the Administrative Procedure Act, 5 U.S.C. 604, requiring a final regulatory flexibility analysis of this revision is therefore inapplicable. Background Information The HSR Act requires all persons contemplating certain mergers or acquisitions to file notification with the Commission and the Assistant Attorney General of the Antitrust Division of the Department of Justice (‘‘the Assistant Attorney General’’) and to wait a designated period of time before consummating such proposed transactions. Congress empowered the Commission, with the concurrence of the Assistant Attorney General, to require ‘‘that the notification * * * be in such form and contain such documentary material and information * * * as is necessary and appropriate’’ to enable the agencies ‘‘to determine whether such acquisitions may, if consummated, violate the antitrust laws.’’ (15 U.S.C. 18a(d)(1988)). Pursuant to that section, the Commission, with the concurrence of the Assistant Attorney General, developed the Antitrust Improvements Act Notification and Report Form for Certain Mergers and Acquisitions. The Form is designed to provide the Commission and the Assistant Attorney General (collectively referred to as ‘‘the enforcement agencies’’) with the information and documentary material necessary and appropriate for an initial evaluation of the potential anticompetitive effects of significant mergers, acquisitions and certain similar transactions. The Form is not intended to elicit all potentially relevant information relating to an acquisition. Completion of the Form by all parties required to file ordinarily will permit both enforcement agencies to determine whether the waiting period should be allowed to expire or be terminated upon request, or whether a request for additional information should be made under section 7A(e) of the Act and 16 CFR 803.20.

All acquiring and acquired persons required by the HSR Act to file notification must complete the Form, or a photostatic or other equivalent reproduction, in accordance with the Rules, 16 CFR 801–803, and the instructions attached to the Form. Statement of Basis and Purpose for the Commission’s Revision of the Form and Removal of the Transitional Rule Form Revision To aid the enforcement agencies in determining the competitive significance of a proposed transaction, the Form requires parties to the transaction to provide information concerning their revenues for a given base year and for the most recent year for which revenue information is available. When the Form was first promulgated on July 31, 1978, 43 FR 33450, and became effective on September 5, 1978, it required data for 1972 as the base year.

The Form was revised in 1980 to require data for 1977 as the base year (45 FR 14205 (March 5, 1980)). In 1986, the Form was revised to require data for 1982 as the base year (51 FR 10368 (March 26, 1986)). Thereafter, a revision to the Form in 1990 changed the base year to 1987 (55 FR 31371 (August 2, 1990)). This notice changes the base year from 1987 to 1992 and requires revisions to the Form relating to the revenue information required by item 5 of the Form and the reference materials to be used in completing item 5, as discussed more fully below. Item 5 of the Form is designed, in part, to elicit economic data classified by Standard Industrial Classification (‘‘SIC’’) codes with respect to business activities within the U.S. in which the reporting person derived any dollar revenues in the base year and in the most recent year for which data are available. (Rule 803.2 (b) and (c), 16 CFR 803.2 (b) and (c), provide for certain limitations on item 5 and other data to be supplied by the reporting person). Such revenue data are required by industry (4-digit SIC code), by product class (5-digit SIC based code), and by product (7-digit SIC based code). More specifically, item 5(a) currently requires that the reporting person provide 1987 revenue data for each 4digit industry in which that filing person was engaged. Item 5(b)(i) currently requires that the reporting person engaged in manufacturing provide 1987 revenue data for each 7digit product code from which it derived any revenues. Item 5(b)(ii) currently requires the reporting person to identify each manufactured product that it has added or deleted since 1987. For those products added, the reporting

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40705 Federal Register / Vol. 60, No. 153 / Wednesday, August 9, 1995 / Rules and Regulations person must provide the total revenue attributable to the added product for the most recent year. (The reporting person may identify the product by a 7-digit product code or in the manner it ordinarily uses.) Item 5(b)(iii) currently requires that the reporting person engaged in manufacturing provided revenue data for the most recent year for each 5-digit product class from which it derived revenues. Item 5(c) currently requires that the reporting person engaged in non-manufacturing industries provide 4-digit revenue data for the most recent year. (Pursuant to Rule 803.2(b), acquired persons are required to limit their responses to item 5 to revenues derived from the assets being acquired and/or the issuer(s) whose voting securities are being acquired).

When originally promulgated, the Form required revenue data for two time periods, i.e., for 1972 and for the most recent year for which the requested information was available. The use of the 1972 ‘‘base year’’ was designed to coincide with the then most recent quinquennial economic census and the Annual Survey of Manufacturers. These Bureau of Census publications (as updated) serve as the most readily available and reliable statistical sources of industry data and universe product revenue data to which individual company product revenue data can be compared. When the original Form was promulgated, the Commission and the Assistant Attorney General stated their intention to revise Item 5 to require submission of 1977 revenue data as soon as the Bureau of the Census published the 1977 Census of Manufacturers (43 FR 33526 (July 31, 1978)). Accordingly, the Commission amended the Form in 1980, in 1986 when the 1982 Census of Manufacturers was published, and again in 1990 when the 1987 Census of Manufacturers was published.

The Bureau of the Census is currently in the process of publishing its Final Reports for the 1992 Census of Manufacturers, and it projects that it will complete the publication of all Final Reports by September 1, 1995. Since most companies within the United States submit data to the Bureau of the Census for economic censuses, many potential reporting persons have gathered, compiled and assembled 1992 revenue data in accordance with the SIC code format for the 1992 Census of Manufacturers. In addition, the Bureau of the Census has completed its Numerical List of Manufactured and Mineral Products, 1992 Census of Manufacturers and Census of Mineral Industries (MC92–R–1) (‘‘1992 Numerical List’’). This publication contains 5-digit product class and 7digit product codes for 1992 and is currently available from the Government Printing Office. Its present availability and the imminent availability of the 1992 product revenue universe data, contained in the Bureau of the Census Reports, to the enforcement agencies, permit the revision of item 5 to require 1992 data instead of 1987 data.

The previous change to the base year in 1990 was effective in 60 days from the date of publication of the Final Rule in the Federal Register. A transitional period during which filers could submit either 1982 or 1987 data was not provided because of significant changes in the 4-digit, 5-digit and 7-digit SIC codes. In contrast, the previous changes to the base year in 1980 and 1986 were effective immediately but provided for a 60-day transitional period during which filers were permitted to submit either the old or the new revenue data. Because there have not been significant changes in the SIC codes from 1987 to 1992, the Commission has determined that the current changes to the Form will be effective immediately, subject to a transitional period until October 1, 1995, (as was permitted in the changeovers to the 1977 and 1982 base years). During such time, reporting persons may use as the base year either 1987 or 1992 when providing revenue and SIC code data in response to items 5(a), 5(b)(i), 5(b)(ii), 5(b)(iii) and 5(c) of the Form. Thereafter, the Commission and the Assistant Attorney General will accept only 1992 revenue and SIC code data. Forms submitted on or after October 1, 1995, that do not provide 1992 base year revenue data will be treated as deficient under § 803.10(c)(2) of the Rules. (16 CFR 803.10(c)(2)). The Commission has decided to provide for a transitional period during which base year revenue data may be submitted for either 1987 or 1992 and the corresponding 1987 or 1992 SIC codes can be used in responding to item 5 in order to minimize the reporting burden on filing persons. The transitional period allows for the submission of new base year revenue data by first-time filers, who may otherwise be required to compile old base year revenue data solely for the purpose of completing the Form. It also permits reporting persons who routinely file notifications with the enforcement agencies to use existing old base year revenue data to complete the Form while finishing their collection and organization of new base year revenue data. Although this approach may temporarily complicate the substantive antitrust reviews conducted by the enforcement agencies, the difficulties should not be significant because there have not been substantial changes in the SIC codes for 1992. Moreover, the enforcement agencies’ antitrust analysis clearly will benefit from the receipt of more up-to-date information. In 1990, when the Form was amended to require submission of 1987 base year revenue data, the Commission and the Assistant Attorney General determined that reporting persons would be required to submit revenue data using the codes published by the Bureau of Census rather then the codes used by Census to collect the information. This requirement is no longer necessary since the Bureau of the Census used the same codes for data collection and for publication of the 1992 Census of Manufacturers. Accordingly, reporting persons will no longer be required to convert revenue data from collected codes to the codes published by the Bureau of Census when completing the Form.

The Commission believes that the notice and comment period ordinarily required by the Administrative Procedure Act (‘‘the APA’’), 5 U.S.C. 553(b) is unnecessary here. Section 553(b)(B) exempts from the APA’s notice and comment requirements the promulgation of a rule where the agency, for good cause, finds that the standard procedure would be ‘‘impracticable, unnecessary, or contrary to the public interest.’’ Promulgation of the proposed revision falls within this exemption for several reasons. First, the public was afforded the opportunity to comment on the original Rules and Form in two notice and comment periods provided pursuant to the rulemaking requirements of the APA. The rulemaking culminated in the promulgation and publication of the Rules and the Form, and was accompanied by a Statement of Basis and Purpose (43 FR 33450 (July 31, 1978)). Since the present amendment does not depart from or alter the substance of the prior rulemakings (i.e., it does not change the type or amount of information required by the Form), further opportunity for comment is unnecessary. See generally, Texaco, Inc. v. Federal Energy Administration, 531 F.2d 1071 (Emer. Ct. App.). cert. denied, 426 U.S. 941 (1976); Durkin v. Edward S. Wagner Co., 115 F. Supp. 118 (D.N.Y. 1953), aff’d 217 F.2d 303 (2d Cir.), cert. denied, 348 U.S. 964 (1954). Second, the Commission and the Assistant Attorney General gave notice of their intention to revise item 5 in the original promulgation of the Rules and the Form in response to numerous

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40706 Federal Register / Vol. 60, No. 153 / Wednesday, August 9, 1995 / Rules and Regulations comments received during the two comment periods of the original rulemaking. Several comments then opposed the requirement that 1972 data based on the SIC Codes be supplied on the grounds that the compilation of the 1972 data would be unduly cumbersome, burdensome and expensive. These positions were rejected by the Commission on the basis that revenue information ‘‘reported by SIC-based categories currently provides the only feasible basis for the effective preliminary review of reported acquisitions within the time limits imposed by the act.’’ (43 FR at 33527, (July 31, 1978)).

Now, for the fourth time, the Commission is changing the requirements of item 5 consistent with its earlier notices. The change will lessen the compliance burden by requiring more recent revenue data, which are generally more easily retrievable by and readily available to reporting persons than 1987 data. The Commission finds that a separate notice and comment period at this time would be unnecessary and not in the public interest and, therefore, it is not required by the APA.

Section 553(d) (5 U.S.C. 553(d)(3)) of the APA requires that 30 days notice be provided to the public before a rule becomes effective, but provides an exception from this requirement where good cause is found. (5 U.S.C. 553(d)(3)). Rather than delay the effective date of the new requirements by 30 days, the Commission has determined in the public interest to accommodate all reporting persons by making the rule effective immediately but providing for a transitional period as described above. The transitional period in effect provides more than 30 days notice to reporting persons before they must complete the Form using 1992 base year revenue and SIC code data as required by this rule.

The Commission, with the concurrence of the Assistant Attorney General, hereby revises the Appendix to 16 CFR part 803.

The Transitional Rule Section 7A of the Clayton Act became effective on February 27, 1977, 150 days after enactment. However, implementing rules could not be promulgated prior to the effective date. Therefore, on January 27, 1977, the Commission, with the concurrence of the Assistant Attorney General, promulgated a final rule designated the Transitional Rule (42 FR 6365 (February 2, 1977)). The Transitional Rule, 16 CFR part 800, created an exemption for all transactions consummated prior to the effective date of the Rules and specified the manner in which the Rules would be implemented during the first 30 days following the effective date. The Rules have now been in effect since September 5, 1978, and there are no longer any transactions that are subject to the Transitional Rule. Thus, the deletion of the Transitional Rule is appropriate at this time. The Commission believes that the notice and comment period ordinarily required by the APA, 5 U.S.C. 553(b), is also unnecessary for the removal of the Transitional Rule, which falls within the exemption provided by Section 553(b)(B) of the APA. Because the Transitional Rule governs no current or future transactions, no members of the public will be affected by the deletion of the rule. Therefore, to make the removal of the Transitional Rule subject to the notice and comment requirements of the APA would be ‘‘impractical, unnecessary, or contrary to the public interest.’’ (5 U.S.C. 553(b)(B)(1988)). The Commission, with the concurrence of the Assistant Attorney General, hereby removes 16 CFR part 800.

List of Subjects in 16 CFR Parts 800 and Antitrust.

Final Rule Accordingly, under the authority at 15 U.S.C. 45(a) and 46(g) the Federal Trade Commission amends title 16 chapter I of the Code of Federal Regulations as follows:

PART 800—TRANSITIONAL RULE 1. Part 800 is removed.

PART 803—TRANSMITTAL RULES 2. The authority citation for part 803 continues to read as follows: Authority: Section 7A(d), Clayton Act, 15 U.S.C. 18a(d) as added by section 201, Hart- Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. 94–435, 90 Stat. 1390. 3. The Appendix is amended by revising pages I and IV of the Instructions to the Antitrust Improvements Act Notification and Report Form for Certain Mergers and Acquisitions, and pages 6 and 7 of the Antitrust Improvements Act Notification and Report Form for Certain Mergers and Acquisitions to read as follows:

* * * * * Appendix [Amended] BILLING CODE 6750–01–M

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40710 Federal Register / Vol. 60, No. 153 / Wednesday, August 9, 1995 / Rules and Regulations By direction of the Commission. Donald S. Clark, Secretary.

[FR Doc. 95–19546 Filed 8–8–95; 8:45 am] BILLING CODE 6750–01–C