Premerger Notification; Reporting and Waiting Period Requirements, 10574-10579 [2013-02821]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 78, Number 31 (Thursday, February 14, 2013)]
[Proposed Rules]
[Pages 10574-10579]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02821]


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FEDERAL TRADE COMMISSION

16 CFR Part 803


Premerger Notification; Reporting and Waiting Period Requirements

AGENCY: Federal Trade Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is proposing amendments to the premerger 
notification rules (``the Rules'') to provide a framework for the 
withdrawal of a premerger notification filing under the Hart Scott 
Rodino Act (``the Act'' or ``HSR''). The Act and Rules require the 
parties to certain mergers and acquisitions to file reports with the 
Federal Trade Commission (``the Commission'') and 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 specified period of time before consummating 
such transactions. The reporting and waiting period requirements are 
intended to enable these enforcement 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. This proposed rulemaking sets 
forth the procedure for voluntarily withdrawing an HSR filing, 
establishes when an HSR filing will be automatically withdrawn after an 
electronically submitted filing publicly announcing the termination of 
a transaction is made with the U. S. Securities and Exchange Commission 
(``SEC'') under the Securities Exchange Act of 1934 and rules 
promulgated under that act, and sets forth the procedure for 
resubmitting a filing after a withdrawal with no additional filing fee.

DATES: Comments must be received on or before April 15, 2013.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``HSR Filing Withdrawals 
Rulemaking, Project No. P859910,'' on your comment, and file your 
comment online at https://ftcpublic.commentworks.com/ftc/hsrruleamendnprm, by following the instructions on the web-based form. 
If you prefer to file your comment on paper, mail or deliver your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, Room H-113 (Annex H), 600 Pennsylvania Avenue NW., 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Robert L. Jones, Deputy Assistant 
Director, Premerger Notification Office, Bureau of Competition, Room 
302, Federal Trade Commission, Washington, DC 20580. Telephone: (202) 
326-3100.

SUPPLEMENTARY INFORMATION:

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 April 15, 2013. 
Write ``HSR Filing Withdrawals Rulemaking, Project No. P859910,'' 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 public Commission Web site, at https://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personally identifiable information, like any 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 
solely responsible for making sure that your comment does not include 
any sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and 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). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you would like the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you must follow the procedure explained in 
FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, 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(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/hsrruleamendnprm, by following the instructions on the web-based 
form. If this Notice appears at https://www.regulations.gov/#!home;tab=search, you also may file a comment through that Web site.
    If you file your comment on paper, write ``HSR Filing Withdrawals 
Rulemaking, Project No. P859910,'' on your comment and on the envelope, 
and mail or deliver it to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-113 (Annex H), 600 
Pennsylvania Avenue NW., Washington, DC 20580. If possible,

[[Page 10575]]

submit your paper comment to the Commission by courier or overnight 
service.
    Visit the Commission Web site at https://www.ftc.gov to read this 
Notice 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 April 15, 2013. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at https://www.ftc.gov/ftc/privacy.htm.

Statement of Basis and Purpose

    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. In addition, 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.
    In this proposed rulemaking, the Commission proposes adding Sec.  
803.12 to set forth the procedure for voluntarily withdrawing an HSR 
filing, establish when an HSR filing will be automatically withdrawn 
after a filing publicly announcing the termination of a transaction is 
made on EDGAR, the Electronic Data Gathering, Analysis, and Retrieval 
system where companies who file reports with the SEC must make such 
submissions, and set forth the procedure for resubmitting a filing with 
no additional filing fee after a withdrawal. Additionally, the 
Commission proposes adding Sec.  803.9(f) to establish that no 
additional filing fee is required when Sec.  803.12(c) is utilized.

Part 803--Transmittal Rules

Section 803.12 Withdraw and Refile Notification.

    Since the beginning of the HSR program, the Agencies have allowed 
HSR filers to withdraw their notification filing at any time. To set 
forth the procedure, and to require automatic withdrawal of a 
notification filing in certain circumstances in which an SEC filing is 
made publicly announcing the termination of a transaction, this 
rulemaking proposes adding rule Sec.  803.12.
A. Voluntary Withdrawal
    Under proposed rule Sec.  803.12(a), at any time, an acquiring 
person, or in transactions to which Sec.  801.30 does not apply (a 
``non-Sec.  801.30 transaction''), an acquiring or an acquired person, 
may withdraw its notification by notifying the FTC and the Antitrust 
Division in writing. Doing so will nullify the filing and terminate the 
pendency of any formal Request for Additional Information (``Second 
Request'') if substantial compliance has not been certified. If the 
transaction has been granted early termination or the initial or 
extended waiting period has expired, the one year period that parties 
have under Sec.  803.7(a) to consummate the transaction will terminate. 
If the parties wish to pursue the acquisition at a future date, new 
notifications and a new filing fee will be required (unless the 
withdraw-refile procedure in paragraph (c) of Sec.  803.12 is 
utilized), and a new waiting period must be observed prior to 
consummation of the acquisition.
B. Automatic Withdrawal
    The Agencies have a strong interest in ensuring that they do not 
expend scarce resources on hypothetical transactions. The affidavit 
requirements of Sec.  803.5 provide assurance that at the time of 
filing, a transaction is not hypothetical. When parties to a 
transaction make an HSR filing, the filing must include an affidavit 
attesting, in the case of a tender offer under Sec.  801.30, that the 
intention to make the tender offer has been publicly announced, and in 
the case of a non-Sec.  801.30 transaction, that a contract, agreement 
in principle or letter of intent has been executed. The affidavit must 
also attest to a good faith intention to proceed with the transaction. 
As the Commission stated when it issued Sec.  803.5:

    Two considerations motivate the inclusion of subparagraph (a)(2) 
and paragraph (b), which require a good faith intention to make the 
acquisition, public announcement of tender offers, and execution of 
a contract, agreement in principle or letter of intent. First, those 
provisions ensure that the parties intend to consummate the 
acquisition, and are not using notification as a means of testing 
the agencies' enforcement intentions. Because of the time and 
resource constraints upon the agency staffs, the agencies could not 
tolerate review of hypothetical transactions. Second, the 
requirement assures that the forms will contain sufficiently 
definitive information about the transaction to permit accurate 
analysis.

43 FR 33450 (July 31, 1978).

    After the HSR filings are made, circumstances may change so that 
the transaction becomes hypothetical in that the factual basis for the 
Sec.  803.5 affidavit no longer exists: the tender offer may have 
expired, been terminated, or been withdrawn, or the agreement between 
the parties may have been terminated. The Agencies have encountered 
some such instances where the parties do not withdraw their filing and 
continue to move forward with the HSR process, for example, by moving 
ahead with second request compliance. This can happen where, in the 
Sec.  801.30 context, despite the tender offer having expired, been 
terminated, or been withdrawn, the offeror indicates that it may launch 
another offer in the future; it can also happen in non-Sec.  801.30 
transactions where a merger agreement has been terminated, yet the 
parties state that they hope to negotiate another. In these instances, 
the investigating Agency is forced to expend scarce resources on what 
has become a hypothetical transaction.
    Proposed rule Sec.  803.12(b) addresses this problem by linking the 
HSR filing with disclosures required by the SEC under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) and rules promulgated 
under that act. Under those SEC disclosure requirements, when the terms 
or conditions of a tender offer have not been met and subsequently the 
tender offer has expired, is terminated or has otherwise been 
withdrawn, the offeror must file an amendment to its Schedule TO filing 
with the SEC. This amended filing brings the current tender offer to a 
definitive end and if the offeror wishes to launch another tender 
offer, it must start the process from the beginning by filing a new 
Schedule TO. Similar disclosure requirements exist for acquisitions 
outside of the Sec.  801.30 tender offer context, those that are 
instead the subject of an agreement between the parties. In the case of 
non-Sec.  801.30 transactions, if the parties terminate a definitive 
material agreement, they must file a Form 8-K with the SEC disclosing 
the termination of the agreement. If the parties subsequently become 
interested in moving forward with the transaction once again and sign 
another definitive material agreement, they must file a new Form 8-K 
with the SEC.\2\
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    \2\ Parties also may file a Form 8-K voluntarily to announce the 
entry into, or termination of, agreements, including letters of 
intent. Under this proposed rulemaking, such voluntary disclosures 
of termination would be treated the same way as a mandatory Form 8-K 
filing disclosing the termination of a definitive material 
agreement.

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[[Page 10576]]

    The SEC disclosure requirements in both the Sec.  801.30 tender 
offer and the non-Sec.  801.30, non-tender offer context are clear. 
Once these termination disclosures are made with the SEC, the parties' 
transaction as filed with the Agencies has become hypothetical because 
the factual basis for a Sec.  803.5 affidavit no longer exists. At this 
point, the parties would not be able to execute the affidavit required 
by Sec.  803.5 without taking additional steps. In the case of a tender 
offer under Sec.  801.30, the acquiring person would have to make a 
public announcement concerning its intent to commence a tender offer in 
order to execute the affidavit. In the case of a non-Sec.  801.30 
transaction, the parties would have to execute a letter of intent or 
some other agreement in order to execute the affidavit.
    The Commission proposes using the SEC's disclosure requirements to 
establish a bright line trigger for the automatic withdrawal of an HSR 
filing. In the case of tender offers under Sec.  801.30, any time a 
tender offer has expired, is terminated or has otherwise been withdrawn 
that results in the filing of an amended Schedule TO with the SEC, the 
Commission proposes that the associated HSR filing will be 
automatically withdrawn. The Commission also proposes that the same 
concept would apply to non-Sec.  801.30 transactions, such that any 
time an agreement between the parties is terminated that results in the 
filing of a Form 8-K with the SEC, the associated HSR filing will be 
automatically withdrawn. In both cases, the Commission proposes that 
the associated HSR filing would be automatically withdrawn on the date 
of the filing with the SEC and that the parties must notify the 
Agencies by letter when the SEC filing is made. Any subsequent 
transaction between the parties, if otherwise reportable, would be 
subject to a new HSR filing and a new filing fee (unless the special 
circumstances of Sec.  803.12(c) apply).
    At the same time, the Commission recognizes that there will be 
instances where transactions that trigger SEC disclosure requirements 
should not result in the automatic withdrawal of an HSR filing. If the 
Agencies have already completed an investigation of a transaction, the 
expiration or withdrawal of a tender offer or the termination of an 
acquisition agreement does not affect the Agencies' ability to allocate 
resources. Thus, the Commission proposes three exceptions for 
transactions that have not been or are no longer being investigated.
    The Commission proposes that the associated HSR filing will not be 
automatically withdrawn:
    (1) If the initial waiting period has expired without issuance of a 
request for additional information or documentary material and without 
an agreement in place with the Agencies to delay closing of the 
transaction (``a timing agreement''); or
    (2) If early termination of that waiting period has been granted, 
without a timing agreement in place; or
    (3) If a second request has been issued, and the Agencies have 
either granted early termination or allowed the extended waiting period 
to expire following certification of compliance without a timing 
agreement in place.
    The Commission understands that withdrawal procedures in this 
proposed rulemaking will not result in an automatic withdrawal in all 
instances in which a transaction becomes hypothetical. For instance, 
parties can make an HSR filing for a non-Sec.  801.30 transaction on 
the basis of a letter of intent without having to make a mandatory 
filing of a Form 8-K with the SEC upon termination and may choose not 
to do so voluntarily. In addition, tender offers for non-public 
companies that are not large enough or widely enough held to be covered 
by the SEC disclosure requirements would not trigger the need to file 
an amended Schedule TO upon termination. Finally, tender offers for 
foreign companies that do not have sufficient U.S. ownership and may 
therefore be exempt from the SEC disclosure requirements would not 
trigger the need to file an amended Schedule TO upon termination.
    The Commission believes the benefit of the approach outlined in 
this proposed rulemaking will outweigh any additional burden on the 
parties. The proposal provides a bright line test that will better 
allow the Agencies to allocate their scarce resources so as to avoid 
expending resources on transactions where SEC filings demonstrate that 
the transaction has become hypothetical.
C. Resubmission
    For years, the Premerger Notification Office (``PNO'') has 
informally permitted an acquiring person voluntarily to withdraw a 
pending HSR filing and resubmit it within two business days without 
paying an additional fee in order to restart the waiting period. This 
informal procedure benefits the filing parties by providing an 
additional 15- or 30-day waiting period for the Agencies to review the 
competitive impact of a transaction without issuing a Second Request. 
When an acquiring person chooses to withdraw and refile, it must update 
certain items in its HSR filing, but it retains the same transaction 
number and does not pay an additional filing fee. Although experienced 
practitioners are familiar with this procedure, this withdraw and 
refile procedure has never been formalized. The Commission proposes to 
do so now through a new rule, Sec.  803.12(c).
    When a filing is voluntarily withdrawn by the acquiring person 
pursuant to proposed Sec.  803.12(a) or the acquiring person's filing 
is automatically withdrawn pursuant to proposed Sec.  803.12(b) as 
discussed above, the acquiring person may resubmit the HSR filing 
without paying an additional fee if the acquiring person complies with 
certain requirements. The proposed resubmission process may only be 
used by an acquiring person in the following circumstances:
    (1) The proposed acquisition must not have changed in any material 
way. For instance, if it is an asset transaction, the resubmitted HSR 
filing cannot involve additional assets. If it is a voting securities 
transaction, the resubmitted HSR filing cannot involve a higher 
notification threshold;
    (2) The resubmitted HSR filing must be recertified, and Items 4(a), 
4(b), 4(c), and 4(d) must be updated;
    (3) The resubmitted HSR filing must include a new executed 
affidavit as required by Sec.  803.5; and
    (4) The resubmitted HSR filing must be refiled with both Agencies 
prior to the close of the second business day after withdrawal.
    The procedure above is straightforward and based on the existing 
informal process. The refiling must involve the same transaction, 
include an updated Item 4, and be made within two business days after 
withdrawal. The requirement that the acquiring person must submit a new 
certification assures the accuracy of the HSR filing. In submitting a 
new affidavit, the acquiring person must attest, in the case of a 
tender offer under Sec.  801.30, that the intention to make the tender 
offer has been publicly announced, and in the case of a non-Sec.  
801.30 transaction, that a contract, agreement in principle or letter 
of intent has been executed, as well as attest to its good faith 
intention to proceed with the transaction.
    If the requirements of proposed Sec.  803.12(c) are met, no new 
filing fee will be assessed and the PNO will assign the same HSR 
transaction number to the resubmitted HSR filing.

[[Page 10577]]

The new waiting period will commence on the same day the resubmitted 
notification filing is received. Withdrawal, whether voluntary or 
automatic, and resubmission without the payment of an additional fee, 
will only be permitted once.
    It has been the longstanding position of the Agencies that only the 
acquiring person may avail itself of refiling. If the acquired person, 
in the case of an acquisition to which Sec.  801.30 does not apply, 
withdraws its notification under paragraph (a) or its filing is 
automatically withdrawn under paragraph (b) of this section, no 
resubmission under paragraph (c) of this section is available.

Section 803.9 Filing Fee

    In previous rulemakings, the Commission has addressed other 
instances in which a filing fee is technically required but is not 
necessary, given the parameters of the specific situation. For example, 
the Commission has stated:

    In transactions in which there are two acquiring persons that 
would have the same responses to Items 5-8 of the Notification and 
Report Form, those two acquiring persons would have no significant 
business activities outside of the jointly controlled acquisition 
vehicle. Accordingly, the agencies are again essentially reviewing 
one transaction and a single filing fee seems appropriate. 
Eliminating the double fee for these transactions is non-
controversial and benefits potential filing parties.

66 FR 8680 (February 1, 2001). In the instance above, although there 
are two acquiring persons and two fees are technically required, a 
single fee is appropriate because it is one transaction.
    The same basis for eliminating the filing fee applies to a 
withdrawn filing that is refiled within two business days and meets the 
other requirements of Sec.  803.12(c). If the acquiring person 
voluntarily withdraws its filing under Sec.  803.12(a) or faces the 
automatic withdrawal provision of proposed Sec.  803.12(b), and the 
Agencies are reviewing a transaction that is the same in all material 
respects, they face no disadvantage if the acquiring person resubmits 
within two business days under Sec.  803.12(c). Accordingly, in such a 
case, no new fee would be required.

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. 16 CFR 1.26(b)(5).

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 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 businesses. 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 GNP resulting in a current threshold of $68.2 million. 
Further, none of the proposed rule amendments expands the coverage of 
the premerger notification rules in a way that would affect small 
business. Accordingly, the Commission certifies that these proposed 
rules 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.

Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3501-3521, requires agencies 
to submit ``collections of information'' to the Office of Management 
and Budget (``OMB'') and obtain clearance before instituting them. Such 
collections of information include reporting, recordkeeping, or 
disclosure requirements contained in regulations. The existing 
information collection requirements in the Rules and Form have been 
reviewed and approved by OMB under Control No. 3084-0005. The current 
OMB clearance expires on August 31, 2014. The proposed rule amendments 
in this NPR would have at most, a minor effect on the FTC's current 
burden estimates. Should these proposed amendments become final, the 
FTC will submit an adjustment request to OMB to modify the currently 
cleared burden estimate.\3\
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    \3\ The currently cleared burden hours total is 53,756, 
calculated as follows: [(1,428 non-index filings x 37 hours) + (22 
transactions requiring more precise valuation x 40 hours) + (20 
index filings x 2 hours)]. See 76 FR 42471, 42479 (July 19, 2011). 
The instant proposed amendments, as detailed below, would 
incrementally add no more than 3 hours to this total. Separately, 
the FTC has estimated incremental PRA burden of 2,664 hours for the 
Commission's proposed amendments to sections 801.1 and 801.2 of the 
Rules that would reflect the longstanding staff position that a 
transaction involving the transfer of exclusive rights to a patent 
in the pharmaceutical industry is potentially reportable under the 
Act. See 77 FR 50057 (August 20, 2012).
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    When calculating burden for the proposed amendments, there are two 
potential scenarios. Under proposed Sec.  803.12(a) and (b), a 
voluntary or automatic withdrawal of a notification that utilizes the 
two-day resubmission process under Sec.  803.12(c) does not generate an 
additional transaction as the acquiring person simply restarts the 
waiting period on the same transaction. Thus, there is no net increase 
in the number of transactions. In a Sec.  803.12(b) scenario involving 
an auto-withdrawn notification that does not utilize the two-day 
resubmission process under Sec.  803.12(c), a new filing would be 
required if the parties pursue the transaction at a later date, but the 
likelihood of this occurring is rare. Based on past experience, this 
situation occurs approximately once every fifteen years. Effectively, 
then, this averages out to a small fraction of a single transaction per 
year that would require non-index HSR filings due to the proposed rule 
change. The currently cleared estimate for a single non-index filing is 
37 hours.\4\ See 76 FR 42471, 42479 (July 19, 2011). PNO staff believes 
that this new filing will require the same work and diligence as any 
new non-index filing. Assuming, then, an average of 37 hours for one 
transaction, when applied to a traditional frequency of .067 (one every 
fifteen years), this amounts to an annual average of 3 hours, rounded 
up. Applied to an assumed hourly wage or rate of $460/hour for an 
executive or attorney's handling, associated labor cost would 
approximate $1,380.
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    \4\ ``Index'' filings pertain to banking transactions, and thus 
would not be affected by the proposed amendments. Index filings are 
incorporated, however, into the FTC's currently cleared burden 
estimates (the FTC has jurisdiction over the administration of index 
filings). They are mentioned here to distinguish them from and to 
further explain what a ``non-index'' filing is. Clayton Act Sections 
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 
Agencies. Thus, parties must submit copies of these ``index'' 
filings, but completing the task requires significantly less time 
than non-exempt transactions (which require ``non-index'' filings), 
as illustrated by the calculations in footnote 2 above.
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    PNO staff believes that any incremental capital/non-labor costs 
presented by the proposed amendments would be marginal. Businesses 
subject to the Rules generally have or would obtain necessary equipment 
for other business purposes. Staff believes that the existing 
requirements (and proposed extension to certain additional

[[Page 10578]]

transactions) necessitate ongoing, regular training so that covered 
entities stay current and have a clear understanding of federal 
mandates. This should constitute a small portion of and be subsumed 
within the ordinary training that employees receive apart from that 
associated with the information collected under the Rules and the 
corresponding HSR Form.

List of Subjects in 16 CFR Part 803

    Antitrust.

    For the reasons stated in the preamble, the Federal Trade 
Commission proposes to amend 16 CFR part 803 as set forth below:

PART 803--TRANSMITTAL RULES

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

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

0
2. Amend Sec.  803.9 by revising paragraph (a) and adding paragraph (f) 
to read as follows:


Sec.  803.9  Filing fee.

    (a) Each acquiring person shall pay the filing fee required by the 
act to the Federal Trade Commission, except as provided in paragraphs 
(b), (c) and (f) of this section. No additional fee is to be submitted 
to the Antitrust Division of the Department of Justice.
* * * * *
    (f) For a transaction described by paragraph (c) of Sec.  803.12, 
the parties shall pay no additional filing fee.
0
3. Add Sec.  803.12 to read as follows:


Sec.  803.12  Withdraw and refile notification.

    (a) Voluntary. An acquiring person, and in the case of an 
acquisition to which Sec.  801.30 does not apply, an acquired person, 
may withdraw its notification by notifying the Federal Trade Commission 
and the Antitrust Division in writing of such withdrawal.
    (b) Upon public announcement of termination. An acquiring person's 
notification or, in the case of an acquisition to which Sec.  801.30 
does not apply, an acquiring or an acquired person's notification, will 
be deemed to have been withdrawn if any filing that publicly announces 
the expiration, termination or withdrawal of a tender offer or the 
termination of an agreement or letter of intent is made by the 
acquiring person or the acquired person with the U.S. Securities and 
Exchange Commission (``SEC'') under the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.) and rules promulgated under that act. The 
acquiring person or acquired person must notify the Federal Trade 
Commission and the Antitrust Division by letter that such filing has 
been made with the SEC and the withdrawal shall be deemed effective on 
the date of the SEC filing. Withdrawal of the HSR notification(s) shall 
occur even if statements are made in the SEC filing indicating a desire 
to recommence the tender offer or enter into a new or amended agreement 
or letter of intent. This paragraph is inapplicable if the initial 15-
day or 30-day waiting period has expired without issuance of a request 
for additional information or documentary material and without an 
agreement in place with the Agencies to delay closing of the 
transaction (``a timing agreement''); or early termination of that 
waiting period has been granted, without a timing agreement in place; 
or if a request for additional information or documentary material has 
been issued and the Agencies have either granted early termination or 
allowed the extended waiting period to expire following certification 
of compliance without a timing agreement in place.
    (c) Resubmission without a new filing fee. (1) An acquiring person 
whose notification has been voluntarily withdrawn pursuant to paragraph 
(a) of this section, or an acquiring person whose notification is 
deemed to have been automatically withdrawn under paragraph (b) of this 
section, may resubmit its notification, thereby initiating a new 
waiting period for the same transaction without an additional filing 
fee pursuant to Sec.  803.9(f). This procedure may be used only one 
time, and only under the following circumstances:
    (i) The proposed acquisition does not change in any material way;
    (ii) The resubmitted notification is recertified, and the 
submission, as it relates to Items 4(a), 4(b), 4(c), and 4(d), is 
updated to the date of the resubmission;
    (iii) A new executed affidavit is provided with the resubmitted HSR 
filing; and
    (iv) The resubmitted notification is refiled prior to the close of 
the second business day after withdrawal.
    (2) If the acquired person, in the case of an acquisition to which 
Sec.  801.30 does not apply, withdraws its notification under paragraph 
(a) of this section or is automatically withdrawn under paragraph (b) 
of this section, no resubmission is available under this paragraph.
    Examples: 1. A commences a tender offer to acquire 100% of B's 
voting securities and files a Schedule TO with the SEC and a premerger 
notification filing with the Federal Trade Commission and the Antitrust 
Division (``the Agencies''). Subsequently, A decides to withdraw the 
tender offer and files an amended Schedule TO announcing the 
withdrawal. A states in its amended filing, designated as a Schedule 
TO-T/A on EDGAR, the SEC's Electronic Data Gathering, Analysis, and 
Retrieval system, which announces the tender offer withdrawal that it 
reserves the right to recommence the tender offer, should circumstances 
change. A's premerger notification filing is deemed to have been 
withdrawn on the date of the filing of the Schedule TO-T/A with the 
SEC.
    2. A commences a tender offer for at least 75% of B's voting 
securities and files a Schedule TO with the SEC stating that the tender 
offer will expire after 30 days. A also files a premerger notification 
filing with the Agencies and a request for additional information or 
documentary material (``Second Request'') is issued. At the end of the 
30 day effective period of the tender offer sufficient shares have not 
been tendered and the tender offer expires. A files a closing Schedule 
TO-T/A with the SEC announcing the expiration of the tender offer. A's 
premerger notification filing is deemed to have been withdrawn on the 
date of the filing of the Schedule TO-T/A with the SEC.
    3. A commences a tender offer for 100% of B's voting securities and 
files a Schedule TO with the SEC stating that shareholders tendering 
their shares will receive $2.00 per share. During the effective period 
of the tender offer, A increases the amount it will pay per share to 
$2.25 and files a Schedule TO-T/A with the SEC announcing the increased 
share price. A's premerger notification filing is not deemed to have 
been withdrawn on the date of the filing of the Schedule TO-T/A with 
the SEC because it is not notifying the SEC that the tender offer has 
expired or is being withdrawn.
    4. A commences a tender offer for 100% of B's voting securities and 
files a Schedule TO with the SEC. During the effective period of the 
tender offer, A and B enter into a merger agreement and A files a 
Schedule TO-T/A with the SEC announcing the withdrawal of the tender 
offer. A's premerger notification filing is deemed to have been 
withdrawn on the date of the filing of the Schedule TO-T/A with the 
SEC. A can, however, refile within two business days on the merger 
agreement, commencing a new waiting period, without paying an 
additional filing fee, if it meets the requirements of Sec.  803.12(c).
    5. A and B enter into a merger agreement conditioned on successful 
completion of due diligence. A and B file premerger notification 
filings with

[[Page 10579]]

the Agencies and also Form 8-Ks with the SEC announcing they have 
entered into an agreement to merge. Subsequent findings in the course 
of due diligence cause A and B to terminate the merger agreement and A 
files an additional Form 8-K announcing the termination of an 
agreement. A states that it may seek to enter into a new or amended 
merger agreement with B. A's premerger notification filing is deemed to 
have been withdrawn on the date of the filing of the Form 8-K 
announcing the termination of the merger agreement. A can, however, 
refile within two business days on a new merger agreement, commencing a 
new waiting period, without paying an additional filing fee, if it 
meets the requirements of Sec.  803.12(c).
    6. A and B enter into a merger agreement and file premerger 
notification filings with the Agencies and Form 8-Ks with the SEC. 
Second requests are issued. A and B subsequently certify compliance 
with the second request, starting the extended waiting period. Prior to 
the expiration of the extended waiting period, the parties enter into 
an agreement with the agency conducting the investigation to delay 
closing of the transaction, allowing the consummation of the 
acquisition only after 30-days' notice (a ``timing agreement''), and 
the extended waiting period expires. During the pendency of the timing 
agreement, A and B terminate the merger agreement and A files a Form 8-
K with the SEC announcing the termination of an agreement. A's 
premerger notification filing is deemed withdrawn on the date of the 
SEC filing as a result of that filing, even though the extended waiting 
period has expired and the parties are still within the one year period 
following that expiration under Sec.  803.7(a). Note that had the 
extended waiting period expired and no timing agreement had been 
entered into, a filing with the SEC announcing the termination of the 
agreement would not result in the withdrawal of A's premerger 
notification filing.
    7. A and B enter into a merger agreement and file premerger 
notification filings with the Agencies and Form 8-Ks with the SEC. The 
agencies complete their review and early termination of the initial 30-
day waiting period is granted. Prior to the expiration of the one year 
period following the grant of early termination, A and B terminate the 
merger agreement and A files a Form 8-K with the SEC announcing the 
termination of an agreement. A's premerger notification filing is not 
deemed withdrawn as a result of the SEC filing because the initial 30-
day premerger notification waiting period had been granted early 
termination. Therefore, the parties still have the full one year period 
prior to the expiration of the notification under Sec.  803.7(a) to 
consummate the transaction should it be recommenced.

    By direction of the Commission.
Donald S. Clark,
Secretary.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Concurring Statement of Commissioner Joshua D. Wright Regarding 
Proposed Amendments to Hart-Scott-Rodino Rules

FTC Matter No. P859910

February 1, 2013.
    The Commission has voted today to publish a notice of proposed 
rulemaking seeking comment on amendments to the Hart-Scott-Rodino (HSR) 
rules. Under the proposed amendments, HSR filings would be 
automatically withdrawn upon the submission of an SEC filing that the 
notified transaction had been terminated.\1\ I wish to thank staff in 
the Premerger Notification Office for their efforts in crafting this 
proposed rule and their diligent administration of the premerger 
notification program.
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    \1\ The proposed rulemaking would also codify, with one 
modification, the existing procedure for pulling and refiling an HSR 
notification without payment of an additional filing fee. I have no 
objections to this proposal.
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    I concur in the Commission's decision because I believe the 
Commission would benefit from the public's input into this proposed 
rulemaking. Nevertheless, I am concerned that the proposed rules may 
impose costs in excess of any potential benefits.
    The proposed rulemaking appears to be a solution in search of a 
problem. The Federal Register notice states that the proposed rules are 
necessary to prevent the FTC and DOJ from ``expend[ing] scarce 
resources on hypothetical transactions.'' Yet, I have not to date been 
presented with evidence that any of the over 68,000 transactions 
notified under the HSR rules have required Commission resources to be 
allocated to a truly hypothetical transaction. Indeed, it would be 
surprising to see firms incurring the costs and devoting the time and 
effort associated with antitrust review in the absence of a good faith 
intent to proceed with their transaction.
    The proposed rules, if adopted, could increase the costs of 
corporate takeovers and thus distort the market for corporate control. 
Some companies that had complied with or were attempting to comply with 
a Second Request, for example, could be forced to restart their 
antitrust review, leading to significant delays and added expenses. The 
proposed rules could also create incentives for firms to structure 
their transactions less efficiently and discourage the use of tender 
offers. Finally, the proposed new rules will disproportionately burden 
U.S. public companies; the Federal Register notice acknowledges that 
the new rules will not apply to tender offers for many non-public and 
foreign companies.
    Given these concerns, I hope that interested parties will avail 
themselves of the opportunity to submit public comments so that the 
Commission can make an informed decision at the conclusion of this 
process.
[FR Doc. 2013-02821 Filed 2-13-13; 8:45 am]
BILLING CODE 6750-01-P