# FEDERAL TRADE COMMISSION (1984)

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

FEDERAL TRADE COMMISSION
WASHINGTON. 0.C. 20580

OFFICt OF
THE CHAfaMAN

September 19, 1985

The Honorable George Bush
President of the Senate
United States Senate
Washington, D.C.
20510
The Honorable Thomas P. O'Neill, Jr.
Speaker of the House of Representatives
Washington, D.C.
20515
Re:

Ei hth Annual
to Congress Pursuant to
ection 201 of the Hart-Scott-Rodino Antitrust
Improvements Ac~ of 1976

Gentlemen:
Section 201 of the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, Pub. L. 94-435, amended the Clayton Act by adding a
new Section 7A, 15 U.S.C. S 18a. Subsedtion (j) of this section
provides as follows:
Beginning not later than January 1, 1978, the
Federal Trade Commission, with the concurrence
of the Assistant Attorney General, shall
annually report to the Congress on the operation
of this section. Such report shall include an
assessment of the effects of this section, of
the effects, purpose, and the need for any rules
promulgated pursuant thereto, and any
recommendations for revisions of this section.
This is the eighth annual report to Congress pursuant to
this provision.
In general, Section 7A establishes a mechanism under which
certain proposed acquisitions of stock or assets must be
reported to the Federal Trade Commission and the Department of
Justice prior to consummation. The parties must then wait a
specified period, usually thirty days, before they may complete
the transaction. Whether a particular acquisition is subject to
these requirements depends upon the size of the acquisition and
the size of the parties, as measured by theif sales and

216

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The Honorable George Bush
The Honorable Thomas P. O'Neill~ ~r.

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assets. Only those classes of acquisitions which are likely to
raise antitrust concerns are subject to the premerger
·
notification program; small acquisitions and acquisitions
involving small parties are excluded from the Act's coverage.
The primary purpose of the statutory sch~me, as the
legislative.history makes clear, is to provide the antitrust
enforcement agencies with a meaningful opportunity to review
large mergers and acquisitions before th€y occur. The premerger
notification program, with its filing and waiting requirements,
provides the agencies with not only the time, but also the
information needed to conduct such a review. Much of the
information needed for a preliminary antitrust evaluation of a
proposed transaction is included in the notification filed with
the· agencies and thus is immediately available for review dur:ing
the thirty-day waiting period.
If either agency determines during that .initial waiting
period that further inquiry is necessary, it is authorized by
Section 7A(e) to request additional information or documentary
materials from.either or bo~h of the parties to a reported
transaction. Such a request extends the waiting period for a
specified period, usually twenty days after all of the requested
information and documents are received. this additional time
provides the agencies with the opportunity to review the new
information and to take appropriate action before the
transaction is consummated.
If either agency believes that a
proposed transaction may violate the antitrust laws, Section
7A(f) allows the agency to seek an injunction in feneral
district court to prohibit consummation of the transaction.
Final rules implementing the premerger notification program
were promulgated by the Commission, with the concurrence of the
Assistant Attorney General, on July 31, 1978. l
At that time, a
comprehensive Statement of Basis and Purpose, containing a

1

43 Fed. Reg. 33450 (July 31, 1978). The rules also appear
in 16 C.F.R. Parts 801 tnrough 803. For more information
concerning the development of the rules and operating
procedures of the premerger notification program, see the
second, third and seventh annual reports covering the years
1978, 1979 and 1983, respectively.
·
217

The Honorable Gecrge Bus~
The Honorable Thomas P. O'Neill, Jr.

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section-by-section analysis of the rules and an item-by-item
analysis of the Premerger Notification and Report Form, was
published. The program became effective on September S, 1978.
In 1983, the Commission, with the concurrence of the Assistant
Attorney General, made several changes in the premerger
notification rules. Those amendments became effective on
August 29, 1983. 2
Statistical Profile of the Prernerger Notification Program
The appendices to this report provide a statistical summary
of the operation of the premerger notification program.
Appendix A shows, for each year (or part of a year) that the
program has bean in operation, the number of transactions
reported, the number of filings received, the number of
transactions in which requests for additional information or
documentary material (hereinafter referred to as "second
requests") were issued, and the number of transactions in which
requests for early termination were received, granted, and
denied. Appendix B provides a month-by-month comparison of the
number of filings received and the number of transactions
reported for 1982 through 1984.
We have added a new table this year, Appendix C, which
provides new second request statistics based on information
which the Co~mission has compiled for filings made since 1981.
We believe that these figures provide a more meaningful measure
of the second request rate than does Appendix A because: 1) the
numbers have been adjusted to eliminate those categories of
transactions in which the agencies could not, or as a practical
matter would not, issue second requests; and 2) the statistics
show the number of second requests issued for transactions
reported in a specified year. In contrast, Appendix A shows all
transactions re~orted and the number of second requests issued
each calendar year irrespective of when the filing was actually
received.
·
The statistics set out in these appendices indicate that
the number of transactions reported in 1984 increased 24.1~ over
the number reported in 1983 (1128 transactions were reported in
1983, 1400 in 1984). The statistics also indicate a large
increase in the number of second requests issued. Appendix A

2

48 Fed. Reg. 34427 (July 29, 1983).

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The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

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the number of second requests issued increased from
Appendix C, which shows the number of
second requests issued for transactions filed in' a specified
year, shows a slightly larger increase (from 48 in 1983 to 80 in
1984). This represents an increase in the number of second
requests issued as a percentage of reported transactions (from
4.3% in 1983 to 5.5% in 1984, based on Appendix A, and from 5.4%
in 1983 to 6.6% in 1984, based on Appendix C.) As the Sixth and
Seventh Annual Reports indicated, the second request rate was on
a persistent downward trend from 1979 through 1983. Nineteen
eighty-four is the first year that the request rate has
increased.
shows~that

48 in 1983 to 77 in 1984.

The statistics also show that the number of transactions
involving requests for early termination has again increased
dramatically. 3 In 1984, early termination was requested in
1064 transactions, while in 1~83 it was requested in only 643,
and in only 341 in 1982. This represents, as a percentage of
reported transactions, a request rate of 76.0%, as compared with
57.0% in 1983 and 29.8% in 1982. The number of requests granted
has increased (from 599 in 1983 to 847 in 1984), although the
percentage of ·requests granted has decreased (from 93.2% in 1983
to 79.6% in 1984).
Recent Develo~me~ts Relating to Premerger Notification Rules and
Procedures
1.

Rule Changes
The Commission staff is currently working on a new rules
package which will clarify the existing rules, codify

chan~e

3

As noted in the Seventh Annual Report, the increases in the
nu~ber of requests for early termination and the high
proportions of those requests that have been granted are
probably attributable to the change in the agencies'
standard for granting early termination, adopted in the
formal interpretation issued by the Commission on August 20,
1982. Under that interpretation, the agencies will grant a
reouest for early termination if at least one party has made
a ;ritten request for early termination, all parties to the
proposed transaction have submitted Notification and Report
Forms and any other information required, and the agencies
have de~errnined that they will not take any enforcement
action during the waiting period. The 1982 interpretation
suoerseded an earlier one which required the parties to
ae;onstrate ~ome special busines~ reason that warranted
early termination of the waiting period.

219

The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

-s-

informal positions of the staff, reduce the r~porting.burden of
the premerger notification program in some areas ~nd expand the
coverage of the program to rea·ch some transactions that may
raise antitrust concerns but are currently not reportable under
existing staff interpretations of the Act and rules. To assist
in the rules change process, as well as to suppl-ement other
publicly available information on merger activity, we have
prepared tables which present statistical information for 1983
Bart-Scott-Rodino filings.
This information, which is set out
in Exhibit A, is similar to the information for 1981 filings
included in the Commission's 1982 request for comments on burden
reduction 4 and the information for 1982 filings included in the
Seventh Annual Report. 5
2.

Co:r.pl i ance

Compliance with the premerger notification program's filing
requirements is believed to be very good. However, this year,
for the first time since the program's inception, an action was
brought under Section 7A{g) (1) to recover civil penalties for
non~compliance. 6
The Coastal Corporation ("Coastal"), a
Houston-based oil and gas company, agreed to pay civil penalties
of $230,000 under a consent judgment negotiated by the
Co~~ission.
Coastal purchased 75,500 shares of stock in the
Houston Natural Gas Company ("HNG") on January 19, 1984, but did
not file a Notification and Report Form until January 27, when
it publicly announced a tender offer to acquire control of
HNG. Coastal claimed that its January 19 acquisition was exempt
fro~ the Act's reporting requirements under Section 7A(c) (9), as
an acquisition of voting securities made "solely for the purpose
of investment." The Bureau of Competition's investigation of
Coastal's purchases indicated that at the time of the January 19
purchases, Coastal's intent was not solely to acquire a passive
investment, but rather included the possibility of acquiring
control of RNG. ·The Commission charged Coastal with violating

4

47 Fed. Reg. 29182 (July 2, 1982). This notice, inclu~ed in
the Sixth Annual Report as Exhibit A, contained eleven
statistical tables showing premerger filings and
enforcement interest in 1981~

5

Seve~th

6

United States v. Coastal Corporation, Cv. No. 84-2675
(D.D.C. filed August 30, 1984).

Annual Report to Congress, Exhibit B.

220

The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

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the Act for at least 23 days, from January 19 until February 11
the day it could legally have acquired the 75,500 shares after '
the waiting period expired. In addition to paying the maximum
civil penalties authorized .by Section 7A(g) (1) for each day that
Coastal was alleged to be in violation of the Act, Coastal also
agreed to divest the HNG stock that it was alleged to have
acquired illegally.
The staff of the Commission also opened a number of other
investigations in 1984 to obtain additional facts about possible
Hart-Scott-Rodino violations. These investigations have focused
on the validity of exemptions claimed by parties to various
transactions and on the possible use of devices to avoid the
requirements of the Act. All but two of these investigations
have been completed with no violation found. Two investigations
are still pending.
These· investigations grew~out of the agencies' monitoring
program which is designed to ensure that the parties to
transactions that are covered by the program comply with its
provisions. The agencies review business newspapers and
industry publications for announcements of transactions that may
be subject to the Act. In addition, industry sources, such as
competitors, customers and suppliers·, and interested members of
the public often provide fUrther information. If a proposed
transaction i~ announced that appears to be covered by the
statute and rules, but no filing is received within a reasonable
time, the agencies send letters to the parties requesting an
explanation for their failure to file. The same procedure is
followed when the agencies learn of a consummated transaction
for which no prior filing was received. In almost all cases,
the responses to these letters have satisfactorily explained why
the transactions were not covered by the Act, or were ex~rnpted
from it. As previously mentioned, however, in a few cases, the
agencies have opened investigations to obtain additional
information. ·Also, in a few cases, most often involving
ind:viduals or relatively small corporations, parties have
faileo to file when required to do so, but their failure was
inadvertent rather than deliberate. In all of the latter cases
in whic~ such violations have been identified, the parties have
belatedly filed Notification and Report Forms when they were
made 'aware of their filing obligation. None of these
transactions have raised any antitrust problem~.

221

The Honorable George Bush
The Honorable Thomas P. O'Nei~l, Jr.
Merge~

-7-

Enforcement Activity During 1984 7
.Y

The Antitrust Division sought two preliminary injunctions
in merger cases in 1984. 8 I~ United States v. Calmar, Inc.,
the Division sought to prevent Calmar's acquisition of Realex
Corporation, alleging that the acquisition may substantially
lessen competition in the markets for regular plastic pump
sprayers and plastic pump dispensers.
The court subsequently
denied the Division's motion for a preliminary injunction. The
Division is negotiating a consent decree with the defendants.
A motion for a preliminary injunction was also filed in
United States v. Rice Growers Association of California, but it
was withdrawn when a hold separate agreement was negotiated.
The Antitrust Division challenged the Rice Growers Association
of California's acquisition of the California rice milling
facilities and related business assets of Pacific International
Rice Mills, Inc.
Trial was completed on February 1, 1985, and
on May 22, 1985, the court handed down a judgement in the
Department's favor.
A plan for divestiture is currently being
formulated.

7

The term "merger" is used generically to include dir~ct or
indirect acquisitions of stock or assets whether through or
as a result of a merger, consolidation, joint venture or
other form of transaction.
!t should be noted that the cases mentioned in this report,
although a matter of public record, were not necessarily
reportable under the premerger notification program.
Because of the Act's provisions regarding the
confidentiality of the information obtained pursuant to the
program, it would be inappropriate to ~dentify which cases
were initiated under the premerger notification program.

8

United States v. Calmar, Inc., Cv. No. 84-5271 (D.N.J. filed
December 20, 1984; preliminary injunction denied
January 30, 1985); and United States v. Rice Growers
Association of California, Cv. No. CIVS-84-1066 EJG (E.D.
Cal. filed August 17, 1984).

222

The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

-a-

rn addition, the Antitrust Division filed five other
complaints in merger cases. 9 All five of these cases, United
States v. International Business Machines Corporation, United
States v. ·Alcan Aluminum Limited, United States v. Waste
Management, Inc., United States v. The LTV Corporation, and
United States v. Beverl Enter rises Inc., have been settled by
t e entry o consent
In United States v. International Business Machines
Corporation, the Division challenged IBM's proposed acquisition
of ROLM Corporation, alleging that competition may be lessened
in the market for mil-spec commercial based computers (computers
manufactured to meet rigorous military specifications). The
consent oecree requires IBM to divest the ROLM Mil-Spec Computer
Division. After IBM proposed Loral Corporation as a potential
purchaser, and the Department decided not to object, divestiture
was accomplished on June 28, 1~85.
In United States v. Alcan hluminum Limited, the Division
challenged Alcan's proposed acquisition of most of the aluminumproducing assets of Atlantic Richfield Company. The consent
decree requires Arco to retain a 60-percent interest in its
newly-completed rolling mill designed to produce can stock ..
Alcan would be permitted to acquire a 40-percent interest in the
facility as part of a production joint venture.
In United States v. The LTV Corporation, the Division
challenged the proposed acquisition by The LTV Corporation (a
subsidiary of the nation's third largest steel company) of the
Republic Steel Corporation (the nation's fourth largest steel
company) in three steel product areas. The consent decree
requires LTV to sell two of Republic's steel mills. One of the
mills, in Massillon, Ohio, was divested on December 4, 1984. A
buyer for the other mill is still being sought.
The complaint filed in United States v. Beverly
Enterprises, Inc. challenged the planned acquisition of Southern
Medical Services, Inc. Beverly is the largest provider of

9

United States v. International Business Machines
Corporation, Cv. No. 84-3508 {D.D.C. filed November 19,
1984); United States v. Alcan Aluminum Limited, Cv. No. C84-1028-L-A (W.D. Ky. filed October S, 19£4); United State~
v. waste Management, Inc., cv. No. 84-2832 {D.O.C. filed
September 12, 1984) · Onited States v. The LTV Corporation,
cv. No. 85-0884 {D.D.C. filed March 21, 1984); and United
States v. Beverly Enterprises, Inc., Cv. No. 84-70-l-MA2
(M.D. Ga. filed January 18, 1984).

223

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The Honorable Thomas P. O'Neill, Jr.

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nursin.g home care in the Uni tea States ana Southern Medical owns
forty-nine nursing homes in seven states. The consent decree
requires Beverly to transfer its interests in eight nursing
homes to First American Health Care, Inc. Dives~iture was
accomplished.on August 1, 1984.
Finally, in Unitea States v. Waste Management, Inc., the
Antitrust Division challenged Waste Management's proposed
acquisition of SCA Services, Inc. Waste Management and SCA were
the largest ana third largest waste management companies,
respectively, in the Unitea States. The consent decree requires
prompt divestiture of about 40 percent of SCA's revenueproducing operations to a thira party. Most of the divestiture
was accomplished on October 24, 1984, though some assets have
not yet been sold.
On two occasions the Antitrust Division informed the
parties to proposea transactions that it would file a
suit challenging the transaction unless the parties restructured
their proposal to avoia competitive problems or abandoned the
proposal altogether. 10 In both instances, the parties either
restructured the transaction to eliminate areas of competitive
overlap or did not consummate, eLiminating any need for legal
action by the Antitrust Division.
Finally, the Division entered into consent decrees in three
merger cases in which complaints had been filed prior to
January 1, 1984. 11
The Commission sought preliminary injunctions in three
merger cases in 1984 ana also issued administrative complaints

10

Department of Justice Press Release of November 21, 1984,
involving the proposed acquisition by Dunlop Olympic Limitea
of the condom business of Youngs Drug Products Corporation;
and Department of Justi~e Press Release of August 14, 1984,
involving the proposed acquisition by Pacific Telecom, Inc.
of the Glacier State Telephone Company and the Juneau and
Douglas Telephone Company.

11

United States v. Tribune Company, Cv. No. 82-260-0RL-C!VR
{M.D. Fla. filed May 26, 1982; consent decree enterea May
25, 1984); United States v. GTE Corporation, Cv. No. 83-1298
(D.D.C. filed May 4, 1983; consent decree entered December
21, 1984) and Unitea States. v. National Bank ana Trust
co~pany of Norwich and National Bank.of Oxford, Cv. No. 83CV-537 (N.D. N.Y. filed May 6, 1983; consent decree entered
Ju:-!e 12, 1984).

224

The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

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in each case. 12 Two of the preliminary injunction suits were
filed against Bass Brothers Enterprises and Columbian
Enterprises, Inc., two producers of carbon black: a petroleum
product which is used to strengthen rubber products such as tires,
inner tubes, belts and other automotive rubber products. 13 In
Federal Trade Commission v. Columbian Enterpris-es, Inc. the
Co~oission sought to enjoin Columbian Enterprises, Inc., the third
largest U.S. producer of carbon black, from acquiring all of the
stock of the Continental Carbon Company, the sixth largest U.S.
producer. The other suit, Federal Trade Commission v. Bass
Brothers Enterprises, Inc., was to prevent Bass Brothers
Enterprises from acquiring the Carbon Black Division of the
Ashland Chemical Company~ the second largest domestic producer of
carbon black. The court granted preliminary injunctions in both
cases. The administrative complaints are still pending. The
complaint against Columbian Enterprises has been withdrawn from
adjudication while the Commiss_ion considers a proposed consent
order. The Bass Brothers case is still in litigation before an
Administrative Law Judge.
The third preliminary injunction action, Federal Trade
Co:r.rnission v. warner Communications, Inc., was brought to block. an
agree~ent between Warner Communications Inc. and Polygram Records,
Inc. to merge their prerecorded music business in the U.S. and the

12

Colum~ian Enterprises, Inc., Docket 9177 (issued May 8,
1984); Bass Brothers Enterprises, Inc., Docket 9178 (issued
May 8, 1984); and Warner Communications, Inc., Docket 9174
{issued March 22, 1984). -

13

Federal Trade Commission v. Bass Brothers Enterprises, Inc.,
1984-1 Trade Cas. {CCH) 166,041 {N.D. Ohio June 6, 1984);
a~a Columbian Enterprises, Inc., 1984-1 Trade Cas. (CCH)
~66,041 (N.D. Ohio June 6, 1984).

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rest of the world. 14 Although the District Court initially
denied the Commission's motion, the Ninth Circuit reversed and
granted a preliminary injunction. Warner and Polygram
subsequently abandoned their plans to merge.
The Commission also authorized a fourth preliminary
injunction action, but the parties abandoned the merger before it
was filed in court.
The Commission accepted consent agreements in five merger
cases in 1984. 15 In Chevron Corporation, Standard Oil Company of
California (SoCal) agreed to divest certain oil and gas assets to
offset the alleged anticompetitive effects of its $13.2 billion
acquisition of Gulf Oil Corporation, the largest merger in
corporate history. In an accompanying hold separate agreement,
SoCal agreed to the independent operation of all of Gulf's oil and
gas assets until the divestitures required by the consent
agreement were completed, and until the Commission determined that
no further divestitures were needed to cure the antitrust
pro!::>lems.
In Texaco Inc., Texaco agreed to divest more than one hundred
million dollars· worth of oil and gas assets to settle charges that
its acquisition of Getty Oil Co. violated the antitrust laws. In
addition, for a period of five years, Texaco must offer
independent West Coast refiners and other Getty customers the
opportunity to purchase stated amounts of California crude oil.
Texaco also agreed to vote favorably on any proposals to increase
the capacity of the Colonial Pipeline, the major petroleum
products pipeline from the Gulf Coast to the Northeast.
In Pilkington Brothers P.L.C., Pilkington, the world's
largest manufacturer of float glass, agreed to reduce and limit
its affiliations with two other producers of float glass so as to
reduce its involvement in the North American float glass
industry. Float glass is used in car and truck windshields and in
specialty applications such as sliding doors and shower
enclosures.·

14

Federal Trade Commission v. Warner Communications., Inc.
742 F.2d 1156 (9th Cir. 1984).

15

Chevron Corporation (accepted October 24, 1984): Texaco Inc.
(accepted·July 10, 1984): Pilkington Br9thers P.L.C.
(accepted June 22, ·1984): Great Lakes Chemical Corporation
_(accepted May 23, 1984): and General Motors Corporation and
1oyota Motor Corporation (accepted April 11, 1984).

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The Honorable Thomas P. O'Neill, Jr.

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+n Great Lakes Chemical Corporation, Great Lakes agreed to
license its brominated flame retardant technology to settle
charges that the company's 1981 acquisition of Velsicol Chemical
Corporation lessened competition by eliminating one of its
competitors.
Finally, in General Motors Corporation and Toyota Motor
Corporation, General Motors and Toyota agreed to limit production
by their joint venture company, New United Motor Manufacturing
Inc., to twelve years and to limit the number of subcompact cars
to be produced to approximately 250,000 vehicles per year. The
consent order also prohibits General Motors, Toyota and New United
from exchanging competitively sensitive technical information
unless required for the legitimate development of the joint
venture.
In addition, the Commission issued final orders in four other
merger cases. 16 The Commission upheld dismissal of a complaint
against B.A.T. Industries Ltd. challenging B.A.T.'s 1978
acquisition of the Appleton Papers Division of NCR Corporation.
American Medical International (uAMI") was ordered to divest
. French Hospital to remedy the threat to competition in the
provision of general acu.te health care service·s in tile city and
county of San Luis Obispo, California, posed by AMI's acquisition
of that facility. The acquisition had given AMI control of three
of the five hospitals in the area. The Commission upheld an
Administrative Law Judge's decision dismissing charges that
challenged Champion Spark Plug Company's acquisition of the
Anderson Company, a manufacturer of replacement windshield
wipers. Finally, the Commission dismissed a complaint challenging
Schlumberger Lirnited's acquisition of Accutest Corporation when
Schlu~berger voluntarily divested Accutest.
Assessment of the Effects of the Premerger Notification Program
Althoug~ a complete assessment of the impact of the premerger
notification program on the business community and on antitrust
enfcrcement is not possible in this limited report, t~e following
observations can be made.

First, as indicated in previous reports, one of the premerger
notification program's primary objectives, eliminating the so-

16

E.A.T. Industries Ltd., Docket 9135 (issued December 31,
1984); American Medical International Inc., Docket 9158
(issued July 5, 1984); Champion Spark Plug Company, Docket
9141 {issued June 20, 1984); and Schlumberger Ltd., Docket
9164 (issued March 23, 1984).

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The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

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called "midnight merger," has been achieved. As noted above the
program's notification requirements very likely ensure that '
virtually all significant mergers or acquisitions occurring in the
United States ~ill be reviewed by the antitrust agencies prior to
consummation. The agencies have the opportunity to challenge
unlawful transactions prior to consummation, thus avoiding the
problem of constructing effective post-acquisiti~n relief.
Second, the parties usually provide s~fficient information
under the premerger notification program to allow the enforcement
agencies to make a prompt determination of whether a transaction
raises any antitrust problems. In some instances, the agencies
and the parties have been able to use this information to isolate
one element of a larger transaction which creates the antitrust
violation. The parties then have an opportunity to cure the
proble~ without sacrificing the benefits of the whole
transaction. In addition, over the years, parties have
increasingly supplied informat~on voluntarily to the Commission
and the Antitrust Division. This cooperation has resulted in
fewer and narrower second requests than would otherwise have been
possible.
·
Third, the· existence of the premerger notification program
has almost certainly made business more aware of the antitrust
consideratio~s raised by proposed transactions.
Similarly, the
greatly increased probability that antitrust violations will be
detected prior to consummation has likely prevented some illegal
mergers that would otherwise have occurred. Prior to the
premerger notification program, businesses could, and frequently
did, consummate transactions of questionable legality before the
antitrust agencies had the opportunity to investigate and prevent
the transactions. The enforcement agencies were forced to pursue
lengthy post-acquisition litigation while the parties reaped the
benefits of their questionable transactions during the ensuing
litigation (and afterwards as well, where effective postacquisition rftlief was not possible/available). Since the
prernerger notification program requires reporting before
consu~~ation, the opportunity and, thus, the incentive to benefit
fro~ illegal acquisitions has been significantly reduced.
Finally, the statistics cited above show that, in the past
year, the agencie~ have granted far more requests for e~r~y .
termination than in the early days of the premerger not1f1cat1on
program. The impact of the 1982 formal interpretation concerning

228 •

The Honorable George Bush
The Honorable Thomas P. O'Neill, Jr.

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early termination of the waiting period appears to be positive. 17
This new approach to granting early termination requests has greatly
reduced the burden of the premerger notification program on the
business community by shortening the waiting period for transactions
that clearly do not raise antitrust problems.
The Assistant Attorney General of the Antitrust Division has
indicated his concurrence with this annual report.

By direction of the Commission.

cc:

The Honorable Strom Thurmond
President Pro Tempore
United States Senate
W~shington, D.C.
20510·

17

See note 3 supra.
229

List of Appendices
Appendix A

Summary of Transactions, 1978-1984

Appendix B

Number of Filings Received and Transactions
Reported by Month for the Years 1982-1984

Appendix C

Transactions in Which Additional Information
Was Requested, 1981 - 1984
List of Attachments

Exhibit A

Statistical tables for 1983, presentin~ data
profiling Hart-Scott-Rodino premerger
notification filings and enforcement
interest.

Appendix A
Swmnary of Transactions, 1978-UU

Se2.-0ec.

.Jan:Jar~r

~

--1222. --12§1. -11ll ~ --l.ill. --lli.i

~

l,083 , 1,1'4

.l.l.28

l,400

6,802

2,S33 12,395

'1'r ansa::ti ens

355

868

824

Filin;s .Reoeivedl

627

l,818

l,462

2,000

l,954

2,001

'.l'ransa:ticns W"lere
Ad:iticri.a.l
Inf er mat i i;,n was
Rl!q1.Je st eel"

36

109

74

79

so

48

77

474

20 5

.Re:p:rted

nS

IOJ

~of

23

SS
51

36
38

4€3

13

33 3

26 4
24 4

28 5

37 6
40 6

246
227

31

ll5

10-:

174

341 7

643 7 l,064

2,872

16
15 .

62
53

89
15

143
31

255 7
86 7

599

847

201

·'4

2.17

461

Tr A."lSacti ons

Involvin; a
Jequest for Ea:ly
Ter ll:i na ti oi 8

Grant~ 8

Deni eel

1 1'bre than a>e filin; may be receivoed far a sin;le tra.nsacticri where there are ~tiple
parties or where the transactioo is a:z!i:>lete:;l through several steps.
2

'Ihese statistics are basee rs ha 1.l'e beer. amel"OeC to reflect 11er e ao:::ur a t.e da t.a &rd
a.re, therefcre, diffe:ent frar. th:ise whid", have a;:peared in previo.is An.""lual Jlet:erts.
'D1ese amerx3ee statistics ireicate that the Q:mr.issicri requested ad:li tier.al inionr.atia: in
46 tran.srticns in 198!, rather tha:: in 48, as previrusly rep:irted, and that the Antitrust
Div isi en requested AC1C i ti onal inf O.."'lt.a ti cri in 24 , rather than 23, transactions in l.982.
3 Ea=.'; l'll.m'ber ircli.:des a>e transa:tiCJ'l in lihid'l the relp.rant ~ vi thiteo.- a request
for ac:X:iticr.a.l informatic::n.
4

Fa:::! ni.mber irclt.Des one transa=ticri lt'hic:h was with:3rawn after the issuan::ie of aeo:ird
reguests. Also, one transacticri ·was wit~awn After the Q:mtis.sicri ci:lt.ained a teap::ira.ry
rest.rainin; order frar. the CDUrt.

5 Che tr aru>a::-ti oi "9S wi tidr awn a.f ter the isst.a.ra! of llKX:l'1d req.ie sts DJ the Cmrr.i ssi cri
an::? two transactions w-ere withdrawn a.fter the issuance of aeo:rd requests DJ the Antitrust
Divisiai.
6 Ea::!: l"IJl!be.: in:l I.Des five tr ansa::-ti ms lt'h i ch vere vi th:ir awn after the issuance cf a
seo::>rd request • In ad:: i ti en, one tr ansacticri lt'?l.S res tr i.rturee an:l refiled after the
Co!Jr.i ss i en i.s.s !Rd a lleO:l"ld req.Je st.
'!hese rurtbers are different fran .-id 11Cre a::c:urate than tl'x:&e whid'l ~ in the Si.xt.h
Amual !lep:irt . O::a.si c:riall y par ti es request early tem.i na ticri b.rt: the - i ting pe: i cd
ex;:ires befcre the 1ge.">Cies c:ari take any fcrir.a.l a:tien to ;rant er deny the request. In
p rev i 045 annual rep:ir ts such requests we re er rc::neais l y ani tt.ed fI'Clll the l'U!be! of requests
for ea: ly termi na ti en b.J t an ~rove..: track.in; systeni has penti. tt.ed us to in:H ate the!r
here. Beca:.ise the ~itin; period expired with::J..Jt the agencies granting early tentinaticn
the recpests were effecti ~ly denied and they are c::ounted in the •aenied" cat1!9o:y.
F\lrthernore, the large increases in 19?2 an:l subsequent ~ars in the rui:be.r of
transa::-tims in whid"l a req..Jest "9S llo!de fer. early t.ermiraticri reflects a liber.tliz.atic:n
cf the st.a.-rla.rd fer granting early tenu.inaticn folio.wing the decisicri in Heublein, Inc. v.
Federal ~ade O:mtissiCJ'l, Cv. B-82-284 (0; O::nr:. filed Mardi 1.5, 1982) an:l the
O::rrr..lssicri's Fom.a.l .Interpretatia; of Al.lg.ist 20, l.962.
7

8 '!hese statistics are based ai the date of the Rs:R filin; .xi not ai the dat.e a::t..icri 1111aS
t:Ak en cri the request .

A;pl!rld b: B

Ntmber of !'iliri;s Recrived 11 arid Tranuct.ialS
Re?Xted t!r' M::r'!th for the Years

.illl

.!ill.
Pilin::rs

1982 - 19s.:.

Tra."'lsaet:ic::r.s

llli.

Fili res

Tr a."'!Sact i ens

Filincs

Tr ansactic:ns

;January

l-'4

92

H9

91

l.31

76

February

104

CJ

116

57

lBO

98

Harc:h

181

105

148

80

255

l.36

April

1.52

95

129

Sl

212

118

Mey

169

105

139

as

l.99

107

.Jirie

213

131

l.91

104

l.93

· ll.2

.'.7uly

178

102

169

92

211

120

Au;n.ist

144

91

l.99

116

260

14'

~te!n't:>er

122

71

184

99

200

109

O:'tober

199

89

l.55

89

229

l.32

Novert:>er

181

100

. 210

107

269

145

~r

167

96

212

124

l.94

103

195~

1144

20Cl

1128

2533

1400

TJ..:_

l/

More tha.~ ~ filing rrl!'J. ~ r~i~ fer a single tra."IS.aCtic:r. vhere
t.~re a:e l'll.lltiple ~ties or where the tra.'"!Sacticn is c:arpletee
t.hr0'4 sever~ &t.e?S.

232

Appendix C
Transactions in Which Additional Information was Requested, 1981 - 1984 l
1981

1982

"1983

1984

Transactions 2

810

722

904

1206

Request for Additional
Information
Number
- Percent 3

80
9.9

43
6.0

s. 4 .

48

80
6.6

l

The statistics are based on the date of the B-S-R filing, not
the date on which the request was issued.

2

These figures omit from the total number of transactions
reported all transactions for which the agencies were not
authori~ed to request additional information.
The
transactions omitted include (1) incomplete transactions
(only one party filed a compliant notification); (2)
transactions reported pursuant to the exemption provisions of
sections 7A(c) (6) and 7A(c) (8) of the Act; and (3)
transactions which were found to be non-reportable. In
addition, where a party filed more than one notification in
the same year to acquire voting securities of the same
corporation, e.g. filing for the 15% threshold and later
tiling for the 25% threshold, only a single consolidated
transaction has been counted because, as a practical matter,
the agencies would not issue more than one second request in
such a case.

3

Second requests as a percentage of the total number of
transactions listed in this table.
233

T~nLt:
~CQUtStTTONS

Tr11nsactlon R_l!_!'-9!..
1$H l I l l onn)

R-S-R Tran11actlone

_!i11mh--""_!._ y

fi~c-~t-:V

t

BY SIZE OF TR~NS~CTTON, y
(Ry Sl'fe Ranqf')

Granted to FTC or OOJ
Pnc~_.r!_t__ y
TlOJ.
TOT/\L
FTC
OOJ

Cl~arance

~ltmlH'f
-·-

FTC

~-·---

..

198J
Second Reque1Jt9 tuued
Number
y
Percent
FTC
OOJ
FTC
DOJ TOT/\L

LeBl'I than 15

111

12.l

l

5

2.7

4.5

7.2

1

1

0.9

·o. 9

1.1

15 up to 25

212

2J.5

18

14

8.5

6.6

15. l

10

5

... 7

2 ...

7.1

25 up to 50

247

27.4

22

12

8.9

4.9

ll.I

I

I

l.2

3.2

C.5

50 up to 100

151

16.9

12

6

7.1

l.9

11.11

..

]

2.5

2.0

... ,

100 up to 150

55

6.1

J

10.9

5.5

1'.4

5

1

9.1

1.1

10.9

150 up to 200

12

l.5

'2

J

6.2

9.4

15.1

1

2

l.1

5.2

200 up to JOO

J7

4.1

7

'··

JOO up to 500

27

l.O

J

2

11.1

7.4

11.5

l.7

:J. 7

500 up to 1000

22

2.4

5

J

22. 7 • lJ. 6

16.4

1000 and up

1

0.1

2

l

28.6

14. l

42.9

1

90]

100.0

80

49

8.9

5.4

14.l

JO

All Tranaactlonl'I

18.9

11.9

l

14. J

21

J.J

U.l

2.3

5.C

11

The el•• of traneactlon 11'1 ba&ed on the aqqreqate total amount of •otlng aecurltlee and aa&eta to be held by the
acquirln9 ~raon al'I a result of the traneactlon and le taken from the response to ltem J(c) of the premerger·
notlflcatlon and report form.

y

During calendar year 1983, 1121 traneactlonl'I were reported under the Rart-Scott-Rodlno premerqer notification pr09ra•.
The smaller number, 903 reflectl'I adjustments to ellmlnate the followin9 types of transaction&• (1) 8 tranaactlone
reported under Section (cl (6) and 159 traneactlonl'I reported under Section (c) (8) (tranaactlone lnvolvln9 certeln
requlated lnduatrles and flnanclal bualnessea)1
(2) 22 transactlons whlch were followed by separate notification• for
one or more addltlonal tranaactlons between the &ame parties durlnq 1983 (such transactions are llated here~· a •in9l•
consolldated tranaactlon)1 Jl transactlons found to~ non-reportable1
(4) 1 Incomplete transaction (only one party to
the transaction flled a compliant notlficatlon) and (5) 1 secondary acqulaltlon (filed pursuant to Section 801.JO
l•l (4)) reported as a result of a reportable primary transaction. The table does not however, e•clude 9 competing
oCCera or 88 ~ultlple-party transact lone (transact lone .fnvolvlnq two or more acquiring or acquired persons).

]./

Percentage o~ total traneactlons.

if

Percentage of transaction range group.

{,F. J t

'1

1'CQUJS tTTONS DY SIZP. OF TRl\HSl\CTION .!J, 1981
(Cumul 11t Ive)
Trane11ctlon Ran~

T$H11110riill ____

ff-S-R Transactlona
------_!!umtl_~

w
\Jl

Pt>rct>nt
---

f'TC .. --- - [l(),J

he ---riar11nce Granted to FTC or OOJ
1'1>rcl'ntaqe ol
Total Numl>1>r of
Clearancl'S Granted
Numher

The •l•• of .trans•ctlon ls baaed on the a9gregate total a111<>unt of •otlng eecurltle• and aasete to be held by the
acqulrlng ~raon 1111 • result of the trans11ctlon and ls taken from the response to lte• J(c) of the pre•erget
notlf lcatlon and report for~.
burlng calendar year 1981, 1128 tran11actlon11 were reported under the Hart-Scott-Rodino pre•erger notlfleatlon pr09r••·
The sm11ller number, 90J, reflects adjustments to eliminate the rollowlng types of tran11actlon111 (l) I tran11actlone
reported under Sectlon (c) (6) and 159 tr11ns11ctlon11 reported under Sectlon (c) {8) (tr11nsactlons lnvolYln9 certain
requl11ted industries 11nd financial buslnesses)1 (2) 22 transactlons which were followed by separate notlflc•tlon• for
one or more additional transactions between the 1111me parties during l9BJ (such transactions 11re listed here •• • alnqle
con,eolld11ted tr11n11actlon) 1 Jl transactlons found to be non-report11ble1 (4) 1 Incomplete trans•ctlon (only one party to
the transaction llled a compll11nt notlflcatlon) and (5) 1 secondary acqul11ltlon (flled purau11nt to Section 801,JO
Cal 14)) reported 11s a result of a reportable primary trane11ctlon. The table does not however, e•clude 9 c0111petln9
oCfera or BB multiple-party tr11nsactlons (transactions lnvolvln9 two or more acquiring or acquired persona).

Notet

Detail ~ay not add to total due to roundln9,

TRl\N~l\C'l'tON~

IG

lNVOT.VlNnt
--------

.. i.n1nce Gr._
- -Cl
------------

NumbPr

f'"TC -- .. -OOJ

1 ~""

_f'rcrntaqf' o(
l\~9et R11n9e Grou(I___
ffi~ ---,iilJ

____8_e_c_o"""n_.d--...R..;:.e_,qu-.o.e.o...s'""t"'"11-=-tr

·_d____

Pt>rc~

~eset

,:r_o~~

•qe

ol

R11n9!._Qroup_

!.'!£.

DOJ

TUTl\L

LeA!'I thl'ln· 15

91

10.1

J

5

J. J

5.5

II. II

1

2

1.1

2.2

1.1

15 up to 25

137

ts. 2

9

12

6.6

8.8

15.l

4

5

2.9

J.6

25 up to. 50

196

21. 7

20

ll

10.2

6.6

1fi. II

6

J

J.1

1. 5

'·'
4.C

50 up to 100

142

15.7

11

6

7,7

4.2

12.0

5

5

1.5

:J.5

1.0

6

5

8.1

7.2

15.9

J

J

4.3

4.:J

1.1

HO up to 200

"19

7.6

200 up to JOO

56

6.2

10

.17.9

6

JOO ·up to 500

u

4.5

1

1

17.1

5.4

8

1

16. J

6

1.1

'

100 up to 150

500 up to 1000

..

4.l

1000 and up

65

7.2

5

not
ava l ll'lble

11 .!/

2.0

1

All Trsnsactlons

'OJ

100.0

80

~flfletll

17. 9

.

1.9

2.4

1

n.5

2.0

111 ••

4

9.2

16.9

1

2

1. 5

3.1

..,

30

21

l.3

2.3

5.C

1.2

1.2

o.,
5.4

14.l

!/

The •••etl of the acquired entity were taken frOll reeponaea to lteM 2(d) (l) (Asset• to be Acquired) or frOll It••• 4(•)
or 4(b) (SEC documents and annual reports) of the premerqer notlflcation and report forM,

y

Durln9 calendar year 1983, 1128 transactlon11 were reported under the Rart-Scott-Rodlno preMer9er notification pr09ra•.
The emaller number, 903, reflecta adjuetments to eliminate the following types of transactlons1 (1) I transaction•
reported under Section (c) (6) and 159 trane11ctions reported under Section (c) (I) (transactions lnvol•ln9 certain
regulated lnduatrles and financial buslneeses)r (2) )2 traneactlone which were followed by separate notlflcatlonl· for
one or more additional transaction!! between the eame p11rtlee during 1981 Cauch trans11ctlons are listed here as a sln9l•
coneolld11ted tr11nsactlon)1 Jl tran~actlons found to be non-reportabler (4) 1 incomplete transaction (only one party to
the tranR11ctlon fl led a cOlllpllant notlflcatlon) and 15) 1 second11ry acqulsltlon (filed pursuant to Section IOI.JO
\al (4)) r~port~d as a result of a reportable prlm11ry trsnsactlon. The t11ble does not howe•er, e•clude 9 C0111petin9
otters or 88 mul~lple-par~y transactions (transactions Involving two or More acqulrln9 or acquired pereonsJ,

1f

The value of the aaeeta of the entity being acquired le not available for the eighteen trensactlon• ln thl1 category,

Nntp1

O~tall

may not add to total due to rounding.

2.4

2.4

0.6

49

10.1

10.1

TRl\NSl\CTIONS hY Sl\r,F:!"

~~1 !'.~-!l~n9f":...
I$ MI I I I on~)

h-S-'!__°t~"!'....:'!.!°'_Ct l O~'!_

~~~~r

Y

-.£!.!'ntaqe o-(~-~

76

Hl1tcell&neous Repair Servlcee

79

Motton Pictures

J

79

Amu1tement 1tnd Recreation Service~,
Except Motion Pictures

4

90

Realth Sen•lces

27

119

Hlscellaneous Services

2

'4

,.dmlnlstratlon of Auman· Resource8 Proqram8

1

99

Nonclssslflable Establishments

DV

Diversified Companies

00

"ot ,.vallable

22 y

1.11 Transsctlons

901

Service~,

Sl!cond RP.quests
l8SUed

Hum er o
-o g ~
Intre-tndufttry
Tran8&ctlon

11nd

2

4

4

4

4

2

2

8

1

l

20

8

8

80

129

'
lO

'

,,.

21

51

l

y

.2-Dlglt 81C codes are part of the system of Standard tnduetrlal Claeelflcatlon establlehed by the U.9.~Go••rmaent,
Standard Jndu1ttrhl Cluslflcatlon Manual, 1972, Executlve Office of the President - Office of Hana9e•ent and Budget~
The SIC groupings used ln thls table were determined from responses submitted by fllln9 parties to lte• S of the
premer9er notlf lcatlon and report form.

y

During calendar year 1981, 1128 transactions were reported under the Rart-Scott-~odlno premer9er notlfleatlon pr~r ...
The smaller number, 903, reflects adju8t~ents to eliminate the followln9 typi!a of tran1tactlons1 (1) I tranaactlone
reported under Section (c) (fi) and 159 tranuctlon9 reported under Section (c) (8) (traneactlone lnvolvln9 certeln
regulated Industries and financial buslnesnee)f (2) 22 tran9actlons which were followed by separate notification• for
one or more addltlonal transactions between the. 8ame parties during 1983 (such transactions are llated her• •• • aln9l•
consolidated tran1tactlon)1 31 transactions found to be non-reportablef (4) 1 Incomplete tran1tactlon (only one party to
the trans&ctlon filed a compliant notification) and (5) 1 secondary ecqulsltlon (flled purauant to Section 901.JO
ta)(4)) reported as a result of a reportable prlmarf transaction.
The table does not howe•er, exclude t compi!tln9
ollers or ee ~ultlple-party transactlons (transactlons ln•ol•ln9 two or more acquiring or acquired pi!rsona).

y

Transactlon8 ln this category repre 8 ent the acqulsltlon of an entity wlth no sales and the acqul•ltlon of an •ntltf with
no ti.s. 1tale8.

Noter

"

Detail may not add to total due to roundlnq.

TllE 11/\RT-SCOTT-ROOINO l\NTITRUS'

·i.tPROVF.HF.NTS ACT BECAME EFFECTIVE

Nu111ber of FTC Enforce111ent Actlons Authorized !/
Calendar
~..'.'__r_

Nl.llllbM of
Tr am1nct Ions

l>rellmlnary
.!!!J unct Ions

Consent Order& 1/
PiirTl-1--r ar t I It

-----

C0111plal nte y
Issued

Number of DOJ !nf orce111ent Actlon11 y
Prdf111lnary
Injunctions

Consent l/
Aqreements

Actions §J
Initiated

2

8

3

10

10

'

3'55

2

l

2

5

868

4

'5

3.

'5

1980

824

2

8

2

6

•
'

1981

1083

3

6

1

5

3

'8

1982

ll44

l

0

2

1

1

1983

1128

0

l

0

1984

1400

•

J

3

2

1978
1979

.Y
.Y

•
•
3

1

4

•
'

4

3

1

y

These legal actions taken by the Federal Trade Com111l1111lon and the Oepart111ent of Justice 111ay or •ay not be baaed on
premer9er fllln9&.

y

Part II conaent order• conelat of eo111plalnt11. and orders Issued 11l111ultaneously during the ln•estlgatl•• etage of a
Matter. Part III coneent orders conelat of ordera lsaued by consent after a complaint ls laeued and the 111atter le ln an
adjudicative atatua.
Include• ad111lnl1trat1 .. eot11plalnt1 l11ued In conjunction with prell111ln1ry Injunction 111atter1s ~pl1lnt1 l11ued ln Part
III actions, but does not include complaints laeued In conjunction with consent orders In Part II actl~ne.

The pre. . rger notification rule• went Into effect on 9epte111~r 5, 1978. Ae•lsed rule 11 CPR S 802.20 went Into err&ct
on Nove111ber 21, 1979. Thie rule expanded considerably the number of transactions valued at $15 111llllon or.le11 that are
exempt fr<>ll reporting requirements.

l/
y

Consent aqree•ente have ~en counted In the year In which the Btlpulatlon wa• entered by the court.
These rl9ure• ~ not Include tranaactlona that were either abandoned or reatructured to ell111lnate a ~tltt .. o .. rtap
In reaponae to an announcement by the Department of an Intention to file ault to block the transaction. The Depart111ent
of Justice started to keep track of these situations In 1982 and reported fl•e In the 1982 annual report, four In the
19.83 annufll report, and three tn the 1984 annual report.

Bource1

Second through Eighth Annual Reports to Con9reaa· pureuant t·o Section 201 of the Rart-Scott-1'odlno Antftruet
Improvements Act of 1976 and enforcement aqency dnta. The flqurea In this table are different than the fl9uree
whlch ap~ared ln Table Xt of the Com~lealon'a 1982 Federal Re9later ftotlce requeatln9 c0111111ent• on burden
reduction. The dlfference la prt 111 arlly attributable to an l111pro•ed record keepln9 aysteM that ha• re•ulted ln 910re
accurate and c0111plete Information. Jn addition, as noted prevloualf, the Federal Trade COlllllll•alon'• consent order•
have bf.en separated Into two new cateqorles In this table. Department of Justice data comes frOfll records kept In
the Antitrust Dlvl~lon'a Office of Operations.

•,

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A2927686607558759. Public record. Not legal advice.