Premerger Notification; Reporting and Waiting Period Requirements, 41293-41298 [2013-16539]
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Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Rules and Regulations
process for authorizing and
administering VEUs were developed
with public comments, allowing
additional public comment on this
amendment to individual VEU
authorizations, which was determined
according to those criteria, is
unnecessary.
Section 553(d) of the APA generally
provides that rules may not take effect
earlier than thirty (30) days after they
are published in the Federal Register.
BIS finds good cause to waive the 30day delay in effectiveness under 5
U.S.C. 553(d)(3) because the delay
would be contrary to the public interest.
BIS is simply amending the list of VEU
authorizations by adding two new endusers consistent with established
objectives and parameters administered
and enforced by the responsible
designated departmental representatives
to the End-User Review Committee.
Delaying this action’s effectiveness
could cause confusion with the new
VEU status as determined by those
authorized government representatives
and stifle the ongoing purpose of the
VEU Authorization Program.
Accordingly, it is contrary to the public
interest to delay this rule’s effectiveness.
No other law requires that a notice of
proposed rulemaking and an
opportunity for public comment be
given for this final rule. Because a
notice of proposed rulemaking and an
opportunity for public comment are not
required under the APA or by any other
law, the analytical requirements of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.) are not applicable. As a result,
no final regulatory flexibility analysis is
required and none has been prepared.
List of Subjects in 15 CFR Part 748
Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.
Dated: July 3, 2013.
Kevin J. Wolf,
Assistant Secretary for Export
Administration.
Accordingly, part 748 of the EAR (15
CFR parts 730–774) is amended as
follows:
PART 748—[AMENDED]
1. The authority citation for 15 CFR
part 748 continues to read as follows:
■
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767,
3 CFR, 1996 Comp., p. 228; E.O. 13222, 66
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice
of August 15, 2012, 77 FR 49699 (August 16,
2012).
2. Amend Supplement No. 7 to part
748 to add in alphabetical order entries
for ‘‘Advanced Micro-Fabrication
Equipment, Inc., China’’ and ‘‘Samsung
China Semiconductor Co. Ltd.’’ in
‘‘China (People’s Republic of)’’ to read
as follows:
■
SUPPLEMENT NO. 7 TO PART 748—AUTHORIZATION VALIDATED END-USER (VEU): LIST OF VALIDATED END-USERS,
RESPECTIVE ITEMS ELIGIBLE FOR EXPORT, REEXPORT AND TRANSFER, AND ELIGIBLE DESTINATIONS
Country
Eligible items
(by ECCN)
Validated end-user
Federal Register
citation
Eligible destination
Nothing in this Supplement shall be deemed to supersede other provisions in the EAR, including but not limited to § 748.15(c).
*
*
Advanced MicroFabrication Equipment, Inc., China.
*
*
2B230, 3B001.c and 3B001.e (items classified under ECCNs 3B001.c and
3B001.e are limited to components and
accessories).
*
*
Advanced Micro-Fabrication Equipment,
Inc., China, 188 Taihua Road, Jinqiao
Export Processing Zone (South Area),
Pudong, Shanghai 201201, China.
*
78 FR [INSERT
PAGE NUMBER],
7/10/13.
*
*
*
1C350.c.3, 1C350.d.7, 2B230, 2B350.d.2,
2B350.g.3,
2B350.i.4,
3B001.a.1,
3B001.b, 3B001.c, 3B001.e, 3B001.f,
3B001.h, 3C002, 3C004, 3D002, and
3E001 (limited to ‘‘technology’’ for items
classified under 3C002 and 3C004 and
‘‘technology’’ for use consistent with the
International Technology Roadmap for
Semiconductors process for items classified under ECCNs 3B001 and 3B002).
*
*
Samsung China Semiconductor Co. Ltd.,
Xinglong Street, Chang’an District,
Xi’an, People’s Republic of China
710065.
*
78 FR [INSERT
PAGE NUMBER],
7/10/13.
*
Samsung China
Semiconductor
Co. Ltd.
*
*
*
BILLING CODE 3510–33–P
FEDERAL TRADE COMMISSION
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16 CFR Part 803
RIN 3084–AA91
Premerger Notification; Reporting and
Waiting Period Requirements
ACTION:
Federal Trade Commission.
Final rule.
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The Commission is amending
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’’)
SUMMARY:
[FR Doc. 2013–16525 Filed 7–9–13; 8:45 am]
AGENCY:
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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 obtain effective
preliminary relief in federal court to
prevent consummation. This final
rulemaking sets forth the procedure for
voluntarily withdrawing an HSR filing,
establishes when an HSR filing will be
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automatically withdrawn if a 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 without incurring an
additional filing fee.
DATES: These final rules are effective
August 9, 2013.
FOR FURTHER INFORMATION CONTACT:
Robert L. Jones, Deputy Assistant
Director, Premerger Notification Office,
Bureau of Competition, Room H–303,
Federal Trade Commission,
Washington, DC 20580, (202) 326–3100,
rjones@ftc.gov.
SUPPLEMENTARY INFORMATION:
Statement of Basis and Purpose
Section 7A of the Clayton Act requires
the parties to certain mergers or
acquisitions to make premerger
notification filings with the Agencies
and to wait a specified period of time
before consummating such transactions.
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 obtain effective
preliminary relief in federal court to
prevent consummation, pursuant to § 7
of the Act. 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 make that
determination. 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.
On February 1, 2013, the Commission
posted a Notice of Proposed Rulemaking
and Request for Public Comment on its
Web site, and the notice was published
in the Federal Register on February 14,
2013.1 The proposal recommended
1 78 FR 10574 (February 14, 2013). The
Commission also has a pending rulemaking
concerning transfers of exclusive rights to
pharmaceutical patents. 77 FR 50057 (August 20,
2012).
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adding § 803.12 to the HSR Rules,2
which would set forth a procedure for
voluntarily withdrawing an HSR filing,
establish when an HSR filing would be
automatically withdrawn after a party
files a public announcement of the
termination of a transaction 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 proposed adding § 803.9(f)
to establish that no additional filing fee
is required when § 803.12(c) is utilized.
The comment period closed on April 15,
2013.
Under proposed rule § 803.12(a), at
any time, an acquiring person, or in
transactions to which § 801.30 does not
apply (a ‘‘non-§ 801.30 transaction’’), an
acquiring or an acquired person, may
withdraw its premerger notification
filing 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 § 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 § 803.12 is utilized),
and a new waiting period must be
observed prior to consummation of the
acquisition.
Proposed rule § 803.12(b) linked the
continuing viability of an 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 with the SEC. This
amended filing brings the pending
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 § 801.30 tender offer
context, such that if the parties
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CFR Parts 801 to 803.
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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. In both cases,
the Commission proposed 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
require a new HSR filing and a new
filing fee (unless the special
circumstances of § 803.12(c) apply).
Proposed rule § 803.12(c) would
apply when a filing is voluntarily
withdrawn by the acquiring person
pursuant to proposed § 803.12(a) or
when the acquiring person’s filing is
automatically withdrawn pursuant to
proposed § 803.12(b) as discussed
above. The acquiring person could
resubmit the HSR filing prior to the
close of the second business day after
withdrawal without paying an
additional filing fee if the acquiring
person complied with certain
requirements. Proposed rule § 803.9(f)
would establish that no filing fee is
required when Proposed rule § 803.12(c)
is used.
The Commission received no public
comments on the proposed rulemaking
from bar associations, industry groups,
or from companies or individuals likely
to be directly affected by the proposed
rules. The Commission received one
public comment addressing the
Proposed Rules, from Mr. Kenneth Hsu,
a law student, on March 29, 2013. The
comment is published on the FTC Web
site at https://www.ftc.gov/os/comments/
hsrruleamend/index.shtm.
Mr. Hsu’s comment did not support
the rule, expressing concerns that the
automatic withdrawal provision could
discourage companies from entering
into HSR transactions, while potentially
incurring substantial costs during a
pending investigation. Mr. Hsu did not
address any other aspect of the
proposed rulemaking. After carefully
considering the comment, discussed
below, the Commission, with the
concurrence of the Assistant Attorney
General, is adopting the rule as
proposed.3
3 The final rules makes one minor grammatical
change from the proposed rule in § 803.12(c),
clarifying the language referring to an acquired
person’s filing.
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Public Comment on the Proposed Rules
Mr. Hsu’s comment claims that, ‘‘the
automatic withdrawal provision . . .
sets forth convincing disincentives to
engage in transactions covered by HSR
rules.’’ The comment does not, however,
provide any data or basis for this
statement. The costs associated with
HSR filings do not appear to deter
parties from pursuing their transactions.
In the rare cases that a party chooses to
terminate a transaction and pursue it at
later date, it seems highly improbable
that companies would forego a
transaction based on the costs of refiling
because of the auto-withdrawal
provision.
The comment claims that the
definition of ‘‘public announcement’’ is
extremely broad and that one statement
indicating a desire to recommence a
tender offer or agreement made in an
SEC filing would trigger the automatic
withdrawal procedure. This claim is not
accurate. § 803.12 is narrowly written
and only two specific events—filing a
Schedule TO–A with the SEC
announcing the expiration or
termination of a tender offer, or filing a
Form 8–K announcing the termination
of a definitive agreement—trigger the
automatic withdrawal procedure, a
process entirely under the control of the
filing company. Recommencing or
adjusting the terms of a tender offer is
not terminating a tender offer under the
rule and would not result in an
automatic withdrawal of an HSR filing.
The comment also states that the new
rules would impose substantial costs on
companies during premerger
investigations while waiting for FTC
approval and that firms can currently
avoid such costs by ‘‘temporarily
withdrawing offers or agreements until
they are assured of FTC approval.’’
Parties to a transaction, however, cannot
avoid these costs by temporarily
withdrawing the offer or agreement, as
a temporary withdrawal does not
currently mitigate the responsibility of
complying with the provisions of the
HSR Act. Under the rules, if the parties
have triggered the auto-withdrawal
provision by making the requisite filing
with the SEC, then they have publicly
announced the termination of the
transaction. As a result, the parties
mitigate their own costs and relieve the
Agencies of the obligation to continue to
spend scarce resources on a now
hypothetical deal. Additionally, if the
parties do intend to restart the deal, the
proposed rules allow parties to refile
within two business days with no
additional filing fee under §§ 803.12(c)
and 803.9(f).
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While the comment claims that the
proposed rules will create confusion
about procedures for FTC and SEC
filings, the Commission believes the
rules will provide clarity by
harmonizing the SEC and FTC treatment
of publicly announced terminations of
transactions and by formalizing what is
currently an informal procedure for
voluntarily withdrawing and refiling an
HSR notification.
Despite the comment’s claim that the
rules will impose substantial costs on
companies and discourage HSR
transactions, no evidence was provided
in support of that assertion and, as
noted above, no comments were
received from bar associations, industry
groups, companies, or individuals who
are likely to be directly affected by the
rules.
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 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 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 $70.9
million. Further, none of the rule
amendments expands the coverage of
the premerger notification rules in a
way that would affect small business. In
addition, very few entities will refile
their premerger notifications and incur
new filing costs following withdrawal of
their notifications under the rules.
Accordingly, the Commission certifies
that these 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
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41295
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 rule amendments
would have, at most, a minor effect on
the FTC’s current burden estimates.4
The rule amendments formalize the
existing informal procedure for parties
to voluntarily withdraw and resubmit
their filings. Consequently, the
amendments do not change the burden
with respect to transactions for which
the filings are voluntarily withdrawn
under § 803.12(a).
Calculating the burden for the autowithdrawal amendments in § 803.12(b)
requires an analysis of two potential
scenarios. In one scenario, a filing is
automatically withdrawn and the
acquiring person utilizes the two-day
resubmission process under § 803.12(c).
In that case, no additional transaction is
generated as the acquiring person
simply restarts the waiting period on the
same transaction. In the second
scenario, the parties to a terminated
transaction for which the filing is
automatically withdrawn do not utilize
the two-day resubmission process under
§ 803.12(c) but later decide to move
forward with the transaction. In that
case, a new filing would be required.
Both of these scenarios are rare, as it is
very unlikely that a transaction for
which the HSR filing is automatically
withdrawn during the merger review
process (due to the parties’ SEC filing
indicating that the transaction has been
terminated) would be subsequently
restarted. Based on past experience, this
would occur approximately once every
fifteen years. If the parties to such a
transaction do not utilize the two-day
resubmission process, the rule change
would require non-index HSR filings
for, on average, a small fraction of a
single transaction per year. The
currently cleared estimate for a single
non-index filing is 37 hours.5 See 76 FR
4 The currently cleared burden hours total is
53,756, calculated as follows: [(1,428 non-index
filings × 37 hours) + (22 transactions requiring more
precise valuation × 40 hours) + (20 index filings 2
hours)]. See 76 FR 42471, 42479 (July 19, 2011).
The instant 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 clarify 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 at 50061.
5 ‘‘Index’’ filings pertain to banking transactions,
and thus would not be affected by the 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 a ‘‘non-index’’
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42471, 42479 (July 19, 2011). PNO staff
believes that this new filing would
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. This labor cost
would be even lower if, instead of filing
a new premerger notification, the parties
utilized the two-day resubmission
process, which requires only a new
certification, new affidavit, and an
update of Item 4 of the form.
PNO staff believes that any
incremental capital/non-labor costs
presented by the 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 extension to certain
additional 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.
The PRA requires that an agency’s
collection of information be necessary
for the proper performance of the
agency’s function, and that the
information collected have ‘‘practical
utility.’’ 6 According to the PRA,
‘‘practical utility’’ is the ability of an
agency to use information, particularly
the ability to process such information
filing. 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.
6 44 U.S.C. 3508: Determination of necessity for
information; hearing.
Before approving a proposed collection of
information, the Director [of the Office of
Management and Budget] shall determine whether
the collection of information by the agency is
necessary for the proper performance of the
functions of the agency, including whether the
information shall have practical utility. Before
making a determination the Director may give the
agency and other interested persons an opportunity
to be heard or to submit statements in writing. To
the extent, if any, that the Director determines that
the collection of information by an agency is
unnecessary for any reason, the agency may not
engage in the collection of information.
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in a timely and useful fashion.7 The rule
amendments will formalize and clarify
procedures for voluntarily withdrawing
and refiling HSR notifications. The
amendments will also harmonize the
SEC and FTC treatment of publicly
announced terminations of transactions.
By allowing parties to voluntarily
withdraw the filings for transactions
they are no longer pursuing and by
automatically withdrawing filings
where the parties have notified the SEC
of the termination of the transactions,
the amendments will relieve the
Agencies of the obligation to continue to
spend scarce resources on transactions
that become hypothetical. If at a later
date the parties choose to renew the
transactions, they may, depending on
the circumstances, re-certify and update
their premerger notification filings or
submit new premerger notification
filings. These updated materials are
necessary for the Agencies to review the
transactions in accordance with the HSR
Act.
List of Subjects in 16 CFR Part 803
Antitrust.
For the reasons stated in the
preamble, the Federal Trade
Commission amends 16 CFR part 803 as
set forth below:
PART 803—TRANSMITTAL RULES
1. The authority citation for part 803
continues to read as follows:
■
Authority: 15 U.S.C. 18a(d).
2. Amend § 803.9 by revising the
introductory text of paragraph (a) and
adding paragraph (f) to read as follows:
■
§ 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.
*
*
*
*
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(f) For a transaction described by
paragraph (c) of § 803.12, the parties
shall pay no additional filing fee.
■
3. Add § 803.12 to read as follows:
7 44 U.S.C. 3502(11). In determining whether
information will have ‘‘practical utility,’’ OMB will
consider ‘‘whether the agency demonstrates actual
timely use for the information either to carry out
its functions or make it available to third-parties or
the public, either directly or by means of a thirdparty or public posting, notification, labeling, or
similar disclosure requirement, for the use of
persons who have an interest in entities or
transactions over which the agency has
jurisdiction.’’ 5 CFR 1320.3(l).
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§ 803.12
Withdraw and refile notification.
(a) Voluntary. An acquiring person,
and in the case of an acquisition to
which § 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 § 801.30 of this
chapter 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 § 803.9(f). This
procedure may be used only one time,
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Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Rules and Regulations
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 § 801.30 of
this chapter does not apply, withdraws
its notification under paragraph (a) of
this section or if its notification 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
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17:22 Jul 09, 2013
Jkt 229001
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
§ 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
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
§ 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
PO 00000
Frm 00039
Fmt 4700
Sfmt 4700
41297
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
§ 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
§ 803.7(a) to consummate the
transaction should it be recommenced.
By direction of the Commission,
Commissioner Wright dissenting.
Donald S. Clark,
Secretary.
Note: The following statement will not
appear in the Code of Federal Regulations.
Dissenting Statement of Commissioner
Joshua D. Wright Regarding
Amendments to Hart-Scott-Rodino
Rules
FTC Matter No. P989316
June 28, 2013
The Commission voted today to
publish final amendments to the HartScott-Rodino (‘‘HSR’’) Rules. The final
amendments establish, among other
things, a procedure for the automatic
withdrawal of an HSR filing upon the
submission of a filing to the U.S.
Securities and Exchange Commission
announcing that the notified transaction
has been terminated.1 I want to thank
1 The amendments to the HSR Rules also would
codify, with one modification, the existing
procedure for pulling and refiling an HSR
notification without payment of an additional filing
E:\FR\FM\10JYR1.SGM
Continued
10JYR1
41298
Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Rules and Regulations
staff in the Premerger Notification Office
for their efforts in drafting the
amendments to the HSR Rules and for
their diligent administration of the
premerger notification program.
I disagree with the Commission’s
decision to publish the final
amendments to the HSR Rules. It has
long been accepted as a principle of
good governance that federal agencies
should issue new regulations only if
their benefits exceed their costs.2 In my
view, the record does not support the
conclusion that the new automatic
withdrawal rule offers any benefits that
justify its adoption. The notice of
proposed rulemaking claims the
automatic withdrawal rule is necessary
to prevent the antitrust agencies from
‘‘expend[ing] scarce resources on
hypothetical transactions.’’ 3 However, I
have not seen evidence that any of the
over 68,000 transactions that have been
notified under the HSR Rules has
resulted in the allocation of resources to
a truly hypothetical transaction.
In the absence of evidence that the
automatic withdrawal rule would
remedy a problem that exists under the
current HSR regime, and thus benefit
the public, I believe we should refrain
from creating new regulations.
[FR Doc. 2013–16539 Filed 7–9–13; 8:45 am]
BILLING CODE 6750–01–P
CONSUMER PRODUCT SAFETY
COMMISSION
16 CFR Part 1500
[Docket No. CPSC–2009–0004]
Children’s Products Containing Lead;
Procedures and Requirements for
Exclusions From Lead Limits Under
Section 101(b) of the Consumer
Product Safety Improvement Act
Consumer Product Safety
Commission.
ACTION: Final rule.
AGENCY:
The Consumer Product Safety
Commission (CPSC or Commission) is
issuing this rule to amend its existing
regulations pertaining to procedures and
requirements for exclusions from lead
TKELLEY on DSK3SPTVN1PROD with RULES
SUMMARY:
fee. I have no objection to this portion of the
amendments.
2 See Exec. Order No. 13,563, 3 CFR part 215
(2012), reprinted in 5 U.S.C. 601 app. (2006 & Supp.
V 2011); Exec. Order No. 12,866, 3 CFR part 638
(1994), reprinted as amended in 5 U.S.C. 601 (2006
& Supp. V 2011); Exec. Order No. 12,291, 3 CFR
part 127 (1982), revoked by Exec. Order No. 12,866,
3 CFR part 638.
3 Premerger Notification; Reporting and Waiting
Period Requirements, 78 FR 10574, 10575
(proposed Feb. 14, 2013) (to be codified at 16 CFR
part 803).
VerDate Mar<15>2010
17:22 Jul 09, 2013
Jkt 229001
limits under section 101(b) of the
Consumer Product Safety Improvement
Act of 2008 (CPSIA) to reflect statutory
changes mandated by Public Law 112–
28.
DATES:
Effective Date: July 10, 2013.
FOR FURTHER INFORMATION CONTACT:
Hyun Sun Kim, Office of the General
Counsel, Consumer Product Safety
Commission, 4330 East West Highway,
Bethesda, MD 20814; email:
hkim@cpsc.gov; telephone: 301–504–
7632.
Under
section 101(a) of the CPSIA, consumer
products designed or intended primarily
for children 12 years old and younger
that contain lead content in excess of
100 ppm are considered to be banned
hazardous substances under the Federal
Hazardous Substances Act (FHSA). The
Commission previously published 16
CFR 1500.90 to provide procedures and
requirements for evaluating products or
materials for possible exclusion from
the lead limits under section 101(b)(1)
of the CPSIA.
On August 12, 2011, Public Law 112–
28 replaced section 101(b)(1) of the
CPSIA in its entirety. Section 101(b)(1)
of the CPSIA, as amended, now
provides for a functional purpose
exception from the lead content limits
under certain circumstances and sets
forth the procedures for granting an
exception in the statute. 15 U.S.C.
1278(a)(b). Because the existing
regulations at 16 CFR 1500.90 no longer
reflect the current law, the Commission
is amending that section to replace the
current procedures and requirements
with the statutory procedures and
requirements set forth under Public Law
112–28. In addition, the Commission
anticipates providing the public with a
staff guidance on the applicable
procedures for requesting an exemption,
which will be made available on the
CPSC Web site.
Although the Administrative
Procedure Act (APA) generally requires
notice and comment rulemaking,
section 553 of the APA provides an
exception when the agency, for good
cause, finds that notice and public
procedure are ‘‘impracticable,
unnecessary, or contrary to the public
interest.’’ In this circumstance, the
Commission concludes that notice and
comment is not necessary. The statutory
provision upon which 16 CFR 1500.90
was based has been revised and there is
no action the Commission could take in
response to comments that would
change the underlying statutory
provision.
SUPPLEMENTARY INFORMATION:
PO 00000
Frm 00040
Fmt 4700
Sfmt 4700
List of Subjects in 16 CFR Part 1500
Consumer protection, Hazardous
materials, Hazardous substances,
Imports, Infants and children, Labeling,
Law enforcement, and Toys.
For the reasons stated above in the
preamble, the Commission amends title
16 of the Code of Federal Regulations as
follows:
PART 1500—HAZARDOUS
SUBSTANCES AND ARTICLES:
ADMINISTRATION AND
ENFORCEMENT REGULATIONS
1. The authority citation for part 1500
continues to read as follows:
■
Authority: 15 U.S.C. 1261–1278, 122 Stat.
3016, 125 Stat. 273.
2. In § 1500.90, revise paragraph (b)
and remove paragraphs (c) through (h)
to read as follows:
*
*
*
*
*
(b) Exclusion of certain materials or
products and inaccessible component
parts. The CPSIA provides the following
functional purpose exception from the
lead limits stated in section 101(a) of the
CPSIA.
(1) Functional purpose exception—(i)
In general. The Commission, on its own
initiative or upon petition by an
interested party, shall grant an
exception to the limit under paragraph
(a) of this section for a specific product,
class of product, material, or component
part if the Commission, after notice and
a hearing, determines that:
(A) The product, class of product,
material, or component part requires the
inclusion of lead because it is not
practicable or not technologically
feasible to manufacture such product,
class of product, material, or component
part, as the case may be, in accordance
with paragraph (a) of this section by
removing the excessive lead or by
making the lead inaccessible;
(B) The product, class of product,
material, or component part is not likely
to be placed in the mouth or ingested,
taking into account normal and
reasonably foreseeable use and abuse of
such product, class of product, material,
or component part by a child; and
(C) An exception for the product,
class of product, material, or component
part will have no measurable adverse
effect on public health or safety, taking
into account normal and reasonably
foreseeable use and abuse.
(ii) Measurement. For purposes of
paragraph (b)(1)(i)(C) of this section,
there is no measurable adverse effect on
public health or safety if the exception
described in paragraph (b)(1)(i) of this
section will result in no measurable
increase in blood lead levels of a child.
■
E:\FR\FM\10JYR1.SGM
10JYR1
]]>Agencies
[Federal Register Volume 78, Number 132 (Wednesday, July 10, 2013)]
[Rules and Regulations]
[Pages 41293-41298]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16539]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
16 CFR Part 803
RIN 3084-AA91
Premerger Notification; Reporting and Waiting Period Requirements
AGENCY: Federal Trade Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is amending 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 obtain effective preliminary relief in federal court to
prevent consummation. This final rulemaking sets forth the procedure
for voluntarily withdrawing an HSR filing, establishes when an HSR
filing will be
[[Page 41294]]
automatically withdrawn if a 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 without incurring an
additional filing fee.
DATES: These final rules are effective August 9, 2013.
FOR FURTHER INFORMATION CONTACT: Robert L. Jones, Deputy Assistant
Director, Premerger Notification Office, Bureau of Competition, Room H-
303, Federal Trade Commission, Washington, DC 20580, (202) 326-3100,
rjones@ftc.gov.
SUPPLEMENTARY INFORMATION:
Statement of Basis and Purpose
Section 7A of the Clayton Act requires the parties to certain
mergers or acquisitions to make premerger notification filings with the
Agencies and to wait a specified period of time before consummating
such transactions. 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 obtain effective preliminary
relief in federal court to prevent consummation, pursuant to Sec. 7 of
the Act. 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 make that determination. 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.
On February 1, 2013, the Commission posted a Notice of Proposed
Rulemaking and Request for Public Comment on its Web site, and the
notice was published in the Federal Register on February 14, 2013.\1\
The proposal recommended adding Sec. 803.12 to the HSR Rules,\2\ which
would set forth a procedure for voluntarily withdrawing an HSR filing,
establish when an HSR filing would be automatically withdrawn after a
party files a public announcement of the termination of a transaction
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 proposed adding Sec. 803.9(f) to establish that no
additional filing fee is required when Sec. 803.12(c) is utilized. The
comment period closed on April 15, 2013.
---------------------------------------------------------------------------
\1\ 78 FR 10574 (February 14, 2013). The Commission also has a
pending rulemaking concerning transfers of exclusive rights to
pharmaceutical patents. 77 FR 50057 (August 20, 2012).
\2\ 16 CFR Parts 801 to 803.
---------------------------------------------------------------------------
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 premerger notification filing 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.
Proposed rule Sec. 803.12(b) linked the continuing viability of an
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 with
the SEC. This amended filing brings the pending 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, such that 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. In both cases, the
Commission proposed 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 require a new HSR filing and a new filing fee (unless
the special circumstances of Sec. 803.12(c) apply).
Proposed rule Sec. 803.12(c) would apply when a filing is
voluntarily withdrawn by the acquiring person pursuant to proposed
Sec. 803.12(a) or when the acquiring person's filing is automatically
withdrawn pursuant to proposed Sec. 803.12(b) as discussed above. The
acquiring person could resubmit the HSR filing prior to the close of
the second business day after withdrawal without paying an additional
filing fee if the acquiring person complied with certain requirements.
Proposed rule Sec. 803.9(f) would establish that no filing fee is
required when Proposed rule Sec. 803.12(c) is used.
The Commission received no public comments on the proposed
rulemaking from bar associations, industry groups, or from companies or
individuals likely to be directly affected by the proposed rules. The
Commission received one public comment addressing the Proposed Rules,
from Mr. Kenneth Hsu, a law student, on March 29, 2013. The comment is
published on the FTC Web site at https://www.ftc.gov/os/comments/hsrruleamend/index.shtm.
Mr. Hsu's comment did not support the rule, expressing concerns
that the automatic withdrawal provision could discourage companies from
entering into HSR transactions, while potentially incurring substantial
costs during a pending investigation. Mr. Hsu did not address any other
aspect of the proposed rulemaking. After carefully considering the
comment, discussed below, the Commission, with the concurrence of the
Assistant Attorney General, is adopting the rule as proposed.\3\
---------------------------------------------------------------------------
\3\ The final rules makes one minor grammatical change from the
proposed rule in Sec. 803.12(c), clarifying the language referring
to an acquired person's filing.
---------------------------------------------------------------------------
[[Page 41295]]
Public Comment on the Proposed Rules
Mr. Hsu's comment claims that, ``the automatic withdrawal provision
. . . sets forth convincing disincentives to engage in transactions
covered by HSR rules.'' The comment does not, however, provide any data
or basis for this statement. The costs associated with HSR filings do
not appear to deter parties from pursuing their transactions. In the
rare cases that a party chooses to terminate a transaction and pursue
it at later date, it seems highly improbable that companies would
forego a transaction based on the costs of refiling because of the
auto-withdrawal provision.
The comment claims that the definition of ``public announcement''
is extremely broad and that one statement indicating a desire to
recommence a tender offer or agreement made in an SEC filing would
trigger the automatic withdrawal procedure. This claim is not accurate.
Sec. 803.12 is narrowly written and only two specific events--filing a
Schedule TO-A with the SEC announcing the expiration or termination of
a tender offer, or filing a Form 8-K announcing the termination of a
definitive agreement--trigger the automatic withdrawal procedure, a
process entirely under the control of the filing company. Recommencing
or adjusting the terms of a tender offer is not terminating a tender
offer under the rule and would not result in an automatic withdrawal of
an HSR filing.
The comment also states that the new rules would impose substantial
costs on companies during premerger investigations while waiting for
FTC approval and that firms can currently avoid such costs by
``temporarily withdrawing offers or agreements until they are assured
of FTC approval.'' Parties to a transaction, however, cannot avoid
these costs by temporarily withdrawing the offer or agreement, as a
temporary withdrawal does not currently mitigate the responsibility of
complying with the provisions of the HSR Act. Under the rules, if the
parties have triggered the auto-withdrawal provision by making the
requisite filing with the SEC, then they have publicly announced the
termination of the transaction. As a result, the parties mitigate their
own costs and relieve the Agencies of the obligation to continue to
spend scarce resources on a now hypothetical deal. Additionally, if the
parties do intend to restart the deal, the proposed rules allow parties
to refile within two business days with no additional filing fee under
Sec. Sec. 803.12(c) and 803.9(f).
While the comment claims that the proposed rules will create
confusion about procedures for FTC and SEC filings, the Commission
believes the rules will provide clarity by harmonizing the SEC and FTC
treatment of publicly announced terminations of transactions and by
formalizing what is currently an informal procedure for voluntarily
withdrawing and refiling an HSR notification.
Despite the comment's claim that the rules will impose substantial
costs on companies and discourage HSR transactions, no evidence was
provided in support of that assertion and, as noted above, no comments
were received from bar associations, industry groups, companies, or
individuals who are likely to be directly affected by the rules.
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 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 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 $70.9 million. Further, none of the rule
amendments expands the coverage of the premerger notification rules in
a way that would affect small business. In addition, very few entities
will refile their premerger notifications and incur new filing costs
following withdrawal of their notifications under the rules.
Accordingly, the Commission certifies that these 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 rule amendments would
have, at most, a minor effect on the FTC's current burden estimates.\4\
---------------------------------------------------------------------------
\4\ 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 2 hours)]. See 76 FR 42471, 42479 (July 19, 2011). The
instant 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 clarify
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 at 50061.
---------------------------------------------------------------------------
The rule amendments formalize the existing informal procedure for
parties to voluntarily withdraw and resubmit their filings.
Consequently, the amendments do not change the burden with respect to
transactions for which the filings are voluntarily withdrawn under
Sec. 803.12(a).
Calculating the burden for the auto-withdrawal amendments in Sec.
803.12(b) requires an analysis of two potential scenarios. In one
scenario, a filing is automatically withdrawn and the acquiring person
utilizes the two-day resubmission process under Sec. 803.12(c). In
that case, no additional transaction is generated as the acquiring
person simply restarts the waiting period on the same transaction. In
the second scenario, the parties to a terminated transaction for which
the filing is automatically withdrawn do not utilize the two-day
resubmission process under Sec. 803.12(c) but later decide to move
forward with the transaction. In that case, a new filing would be
required. Both of these scenarios are rare, as it is very unlikely that
a transaction for which the HSR filing is automatically withdrawn
during the merger review process (due to the parties' SEC filing
indicating that the transaction has been terminated) would be
subsequently restarted. Based on past experience, this would occur
approximately once every fifteen years. If the parties to such a
transaction do not utilize the two-day resubmission process, the rule
change would require non-index HSR filings for, on average, a small
fraction of a single transaction per year. The currently cleared
estimate for a single non-index filing is 37 hours.\5\ See 76 FR
[[Page 41296]]
42471, 42479 (July 19, 2011). PNO staff believes that this new filing
would 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. This labor
cost would be even lower if, instead of filing a new premerger
notification, the parties utilized the two-day resubmission process,
which requires only a new certification, new affidavit, and an update
of Item 4 of the form.
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\5\ ``Index'' filings pertain to banking transactions, and thus
would not be affected by the 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 a ``non-index'' filing. 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 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
extension to certain additional 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.
The PRA requires that an agency's collection of information be
necessary for the proper performance of the agency's function, and that
the information collected have ``practical utility.'' \6\ According to
the PRA, ``practical utility'' is the ability of an agency to use
information, particularly the ability to process such information in a
timely and useful fashion.\7\ The rule amendments will formalize and
clarify procedures for voluntarily withdrawing and refiling HSR
notifications. The amendments will also harmonize the SEC and FTC
treatment of publicly announced terminations of transactions. By
allowing parties to voluntarily withdraw the filings for transactions
they are no longer pursuing and by automatically withdrawing filings
where the parties have notified the SEC of the termination of the
transactions, the amendments will relieve the Agencies of the
obligation to continue to spend scarce resources on transactions that
become hypothetical. If at a later date the parties choose to renew the
transactions, they may, depending on the circumstances, re-certify and
update their premerger notification filings or submit new premerger
notification filings. These updated materials are necessary for the
Agencies to review the transactions in accordance with the HSR Act.
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\6\ 44 U.S.C. 3508: Determination of necessity for information;
hearing.
Before approving a proposed collection of information, the
Director [of the Office of Management and Budget] shall determine
whether the collection of information by the agency is necessary for
the proper performance of the functions of the agency, including
whether the information shall have practical utility. Before making
a determination the Director may give the agency and other
interested persons an opportunity to be heard or to submit
statements in writing. To the extent, if any, that the Director
determines that the collection of information by an agency is
unnecessary for any reason, the agency may not engage in the
collection of information.
\7\ 44 U.S.C. 3502(11). In determining whether information will
have ``practical utility,'' OMB will consider ``whether the agency
demonstrates actual timely use for the information either to carry
out its functions or make it available to third-parties or the
public, either directly or by means of a third-party or public
posting, notification, labeling, or similar disclosure requirement,
for the use of persons who have an interest in entities or
transactions over which the agency has jurisdiction.'' 5 CFR
1320.3(l).
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List of Subjects in 16 CFR Part 803
Antitrust.
For the reasons stated in the preamble, the Federal Trade
Commission amends 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 the introductory text of 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 of
this chapter 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,
[[Page 41297]]
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 of this chapter does not apply, withdraws its notification
under paragraph (a) of this section or if its notification 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 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, Commissioner Wright dissenting.
Donald S. Clark,
Secretary.
Note: The following statement will not appear in the Code of
Federal Regulations.
Dissenting Statement of Commissioner Joshua D. Wright Regarding
Amendments to Hart-Scott-Rodino Rules
FTC Matter No. P989316
June 28, 2013
The Commission voted today to publish final amendments to the Hart-
Scott-Rodino (``HSR'') Rules. The final amendments establish, among
other things, a procedure for the automatic withdrawal of an HSR filing
upon the submission of a filing to the U.S. Securities and Exchange
Commission announcing that the notified transaction has been
terminated.\1\ I want to thank
[[Page 41298]]
staff in the Premerger Notification Office for their efforts in
drafting the amendments to the HSR Rules and for their diligent
administration of the premerger notification program.
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\1\ The amendments to the HSR Rules also would codify, with one
modification, the existing procedure for pulling and refiling an HSR
notification without payment of an additional filing fee. I have no
objection to this portion of the amendments.
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I disagree with the Commission's decision to publish the final
amendments to the HSR Rules. It has long been accepted as a principle
of good governance that federal agencies should issue new regulations
only if their benefits exceed their costs.\2\ In my view, the record
does not support the conclusion that the new automatic withdrawal rule
offers any benefits that justify its adoption. The notice of proposed
rulemaking claims the automatic withdrawal rule is necessary to prevent
the antitrust agencies from ``expend[ing] scarce resources on
hypothetical transactions.'' \3\ However, I have not seen evidence that
any of the over 68,000 transactions that have been notified under the
HSR Rules has resulted in the allocation of resources to a truly
hypothetical transaction.
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\2\ See Exec. Order No. 13,563, 3 CFR part 215 (2012), reprinted
in 5 U.S.C. 601 app. (2006 & Supp. V 2011); Exec. Order No. 12,866,
3 CFR part 638 (1994), reprinted as amended in 5 U.S.C. 601 (2006 &
Supp. V 2011); Exec. Order No. 12,291, 3 CFR part 127 (1982),
revoked by Exec. Order No. 12,866, 3 CFR part 638.
\3\ Premerger Notification; Reporting and Waiting Period
Requirements, 78 FR 10574, 10575 (proposed Feb. 14, 2013) (to be
codified at 16 CFR part 803).
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In the absence of evidence that the automatic withdrawal rule would
remedy a problem that exists under the current HSR regime, and thus
benefit the public, I believe we should refrain from creating new
regulations.
[FR Doc. 2013-16539 Filed 7-9-13; 8:45 am]
BILLING CODE 6750-01-P
