The Federal Trade Commission has proposed new rules to exempt certain mergers and acquisitions from prior review by the FTC and the Department of Justice. Under the proposal, certain classes of transactions that are unlikely to raise antitrust concerns would be exempted from the reporting requirements of the Hart-Scott-Rodino Act. That act requires entities contemplating large mergers to file premerger reports with the FTC and the DOJ, and to wait a specified period of time before consummating the transactions. The act gives the government time to review and challenge anticompetitive mergers in court.
"The Hart-Scott-Rodino Act has served the American public well in providing an early warning system for anticompetitive mergers that have the potential of raising prices and diminishing service for consumers," said William J. Baer, Director of the FTC Bureau of Competition, "but experience has taught us that certain types of transactions do not raise competitive concerns. The rules announced today will exempt these transactions from the reporting requirements of the act, saving the business community the cost of reporting and allowing the FTC and DOJ to focus resources on transactions that are more likely to pose competitive harm."
In March, Janet D. Steiger, then Chairman of the FTC and Anne K. Bingaman, Assistant Attorney General in charge of Justice's Antitrust Division, announced eight initiatives to facilitate compliance with the HSR Act, including initiatives to reduce the number of filings required under the Act. The proposed rules announced today build on those initiatives and reflect extensive input from the private antitrust bar in response to the initiatives and close coordination between the FTC and the Justice Department.
The FTC is seeking public comment on the proposals before implementing them.
The five proposed changes would exempt:
- certain purchases of goods in the ordinary course of business, including certain purchases of used durable goods where the purchase is designed to replace or expand production capacity;
- certain real estate acquisitions not likely to violate the antitrust laws;
- acquisitions of carbon-based mineral reserves valued at $200 million or less;
- acquisition of voting securities of companies that hold real property if a direct acquisition of the property, such as the real estate and mineral reserve property identified above, would be exempt; and
- institutional investors acquiring real estate solely for rental or investment purposes.
The Commission vote to publish the notice of proposed rulemaking was 5-0. The notice will appear in the Federal Register soon, and will be subject to public comment until September 29, 1995. Comments should be addressed to the FTC, Office of the Secretary, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580 and to the Assistant Attorney General, Antitrust Division, Department of Justice, Room 3214, Washington, D.C. 20530.
Copies of the Federal Register Notice is available from the FTC's Public Reference Branch, Room 130, at the address listed above; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC File No. P 812 937)