Formal Interpretation No. 6

Bureau of Competition

April 10, 1979

Formal Staff Interpretation Under 16 C.F.R. § 803.30 Concerning Incorporation by Reference in the Antitrust Improvements Act Premerger Notification and Report Forms.

With regard to several recent filings of the Antitrust Improvements Act Notification and Report Form, 16 C.F.R. § 803 - Appendix ("the Form"), the following question has arisen: To what extent may a filing person respond to items on, or to requirements that documentary material be supplied with, its Form by referring to information on or to materials accompanying another Form filed either by it or by another person? The issue of incorporation by reference has been raised most frequently in connection with the SEC documents required to be supplied by Item 4(a), although it might arise with other items as well. Persons filing for an acquisition have sought to incorporate by reference documents supplied with the Form relating to a previous acquisition by the same person. The Commission staff has taken the position that Forms which incorporate by reference information not supplied on, or documents not accompanying, the same Form will generally be deemed deficient within the meaning of § 803.10(c)(2) of the premerger notification rules, 16 C.F.R. § 803.10(c)(2).

This decision is based in part on the fact that in the antitrust review of a transaction, the Form and all accompanying documents are frequently sent by the Federal Trade Commission and the Antitrust Division of the Department of Justice to their various litigating groups, including the regional offices of both agencies. These documents may not, therefore, be available to the premerger notification offices of both agencies which must review any subsequent transactions by that person. In view of the time constraints under which the staffs of both agencies must operate, the review of the premerger Forms which is mandated by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. §18a ("the Act") necessitates that all documentary materials which are required to be supplied with the Form accompany each filing, even though some inconvenience to filing persons may result.

This position will be taken even when the parties to a previously reported acquisition are filing again at a higher notification threshold. Under § 802.21(b) of the premerger notification rules, 16 C.F.R. § 802.21(b), the parties to a reportable acquisition may, after the expiration of the waiting period, make additional acquisitions which do not cross a higher notification threshold. Such acquisitions are exempt from reporting and waiting period requirements for five years. Thus substantial time may elapse between notifications involving the same parties, and the agencies may during that time have destroyed some or all of the information previously provided. Incorporation by reference would, in this situation, tend to interfere with the prompt review of premerger notification Forms required by the Act.

An exception to this restriction seems justified in the following circumstances. For tax or other reasons, parties to a merger or takeover sometimes choose to implement the transaction through an essentially contemporaneous, two step process, such as a cash tender offer for less than 5O% of the target's stock, followed by a merger of the acquiring person with the target. The staff is willing to permit incorporation by reference where filings by the same parties are made with respect to a higher notification threshold and are received by the enforcement agencies within ninety days after the earlier filings with respect to the lower threshold.

The above discussion does not restrict incorporation by reference of the answer to one item on the Form, or of accompanying documentary materials, in the response to another item on the same Form. The only limitation to such incorporation is the requirement that the responses to all items must be clear, complete, and unambiguous.

The Assistant Attorney General in charge of the Antitrust Division has concurred in this interpretation.


Malcolm R. Pfunder
Assistant Director for Evaluation