The Federal Trade Commission today issued final changes to its premerger rules to establish procedures for the withdrawal of a Hart Scott Rodino (HSR) premerger notification filing in certain circumstances.
As part of the agency’s ongoing review of its rules and procedures to promote efficient government, the proposed rules accepted today formalize the long-standing position of the FTC’s Premerger Notification Office regarding the withdrawal of an HSR filing, as well as the withdrawal and refiling of an HSR filing without paying an additional fee. The withdraw and refile procedure, entirely under the control of HSR filers, allows additional time to review a transaction during the initial waiting period, thus potentially avoiding a costly second request. This procedure has been used informally for 30 years.
The rules adopted today also establish a procedure for the automatic withdrawal of an HSR filing when filings are made with the U.S. Securities and Exchange Commission (SEC) announcing that a transaction has been terminated. The new rule aligns the treatment of abandoned transactions by the FTC and the Department of Justice with the requirements of the SEC regarding public announcements of the termination of a transaction.
“The rule makes sense,” said Richard Feinstein, Director of the Bureau of Competition. “It will benefit the public by ensuring that the antitrust agencies will spend scarce resources only on viable, ongoing transactions, and is not likely to burden filers since it only applies where a filer has publicly stated that a transaction is no longer viable.”
The Commission vote approving the proposed changes was 3-1, with Commissioner Joshua D. Wright voting no and issuing a separate statement.
Commissioner Wright did not object to formalizing the existing procedure allowing filers to voluntarily pull and refile an HSR notification, but objected to the automatic withdrawal of an HSR filing upon notice to the SEC that a transaction has been terminated.
The FTC conducts regular reviews of all its rules and guides on a rotating basis to make sure that they are up-to-date, effective, and not overly burdensome. Under the Hart-Scott-Rodino Act, the FTC and the DOJ review most of the proposed transactions that affect commerce in the United States and are over a certain size to ensure that they do not substantially lessen competition. The law requires that companies file premerger reports with the agencies and wait a specified period before completing such transactions.
The FTC believes that accepting the proposed amendments will enhance the efficiency of its premerger notification program. The FTC received one public comment in response to the Notice of Proposed Rulemaking. The FTC worked closely together with the Department of Justice to amend the rules. The Assistant Attorney General of the Antitrust Division of the Department of Justice concurs in the final rules. The rules will become effective 30 days after publication in the Federal Register.
The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.