# [Billing Code: 6750-01-P]

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## Record

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

## Text

[Billing Code: 6750-01-P]
FEDERAL TRADE COMMISSION
16 CFR Parts 801, 802 and 803
RIN 3084-AB46
Premerger Notification; Reporting and Waiting Period Requirements
AGENCY: Federal Trade Commission.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Federal Trade Commission (“FTC” or “Commission”) is proposing
amendments to the premerger notification rules (“the Rules”) that implement the HartScott-Rodino Antitrust Improvements Act (“the Act” or “HSR”) to change the definition
of “person” and create a new exemption. The Commission also proposes explanatory and
ministerial changes to the Rules, as well as necessary amendments to the HSR Form and
Instructions to effect the proposed changes.
DATES: Comments must be received on or before [INSERT DATE 60 DAYS AFTER
DATE OF PUBLICATION IN THE FEDERAL REGISTER].
ADDRESSES: Interested parties may file a comment online or on paper by following the
instructions in the Invitation to Comment part of the SUPPLEMENTARY
INFORMATION section below. Write “16 CFR Parts 801-803: Hart-Scott-Rodino
Coverage, Exemption, and Transmittal Rules; Project No. P110014” on your comment.
File your comment online at https://www.regulations.gov by following the instructions on
the web-based form. If you prefer to file your comment on paper, mail your comment to
the following address: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Avenue NW, Suite CC-5610 (Annex J), Washington, DC 20580, or deliver

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your comment to the following address: Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th Street, SW, 5th Floor, Suite 5610 (Annex J),
Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: Robert Jones (202-326-3100),
Assistant Director, Premerger Notification Office, Bureau of Competition, Federal Trade
Commission, 400 7th Street SW, Room CC-5301, Washington, DC 20024.
SUPPLEMENTARY INFORMATION:
Invitation to Comment
You can file a comment online or on paper. For the Commission to consider
your comment, we must receive it on or before [INSERT DATE 60 DAYS AFTER
DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Write “16 CFR Parts
801-803: Hart-Scott-Rodino Coverage, Exemption, and Transmittal Rules; Project No.
P110014” on your comment. Your comment – including your name and your state –
will be placed on the public record of this proceeding, including the
https://www.regulations.gov website.
Because of the public health emergency in response to the COVID-19 outbreak
and the agency’s heightened security screening, postal mail addressed to the Commission
will be subject to delay. We strongly encourage you to submit your comment online
through the https://www.regulations.gov website. To ensure the Commission considers
your online comment, please follow the instructions on the web-based form.
If you file your comment on paper, write “16 CFR Parts 801-803: Hart-ScottRodino Coverage, Exemption, and Transmittal Rules; Project No. P110014” on your
comment and on the envelope, and mail your comment to the following address: Federal

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Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC5610 (Annex J), Washington, DC 20580, or deliver your comment to the following
address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex J), Washington, DC 20024. If possible, please
submit your paper comment to the Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible website,
https://www.regulations.gov, you are solely responsible for making sure your comment
does not include any sensitive or confidential information. In particular, your comment
should not include sensitive personal information, such as your or anyone else’s Social
Security number; date of birth; driver’s license number or other state identification
number, or foreign country equivalent; passport number; financial account number; or
credit or debit card number. You are also solely responsible for making sure that your
comment does not include any sensitive health information, such as medical records or
other individually identifiable health information. In addition, your comment should not
include any “trade secret or any commercial or financial information which . . . is
privileged or confidential,” – as provided by Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2) – including in particular
competitively sensitive information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is requested
must be filed in paper form, must be clearly labeled “Confidential,” and must comply
with FTC Rule 4.9(c). In particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for the request, and

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must identify the specific portions of the comment to be withheld from the public
record. See FTC Rule 4.9(c). Your comment will be kept confidential only if the FTC
General Counsel grants your request in accordance with the law and the public interest.
Once your comment has been posted publicly at www.regulations.gov – as legally
required by FTC Rule 4.9(b) – we cannot redact or remove your comment, unless you
submit a confidentiality request that meets the requirements for such treatment under
FTC Rule 4.9(c), and the General Counsel grants that request.
Visit the FTC website to read this NPRM and the news release describing it. The
FTC Act and other laws that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments it receives on or before [INSERT
DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
For information on the Commission’s privacy policy, including routine uses permitted by
the Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Overview
The Act and Rules require the parties to certain mergers and acquisitions to file
notifications (“HSR Filing”) with the Federal Trade Commission and with 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 the Agencies to determine whether a proposed
merger or acquisition may violate the antitrust laws if consummated and, when

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appropriate, to seek an injunction in federal court in order to enjoin anticompetitive
mergers prior to consummation.
In this notice of proposed rulemaking (“NPRM”), the Commission proposes
amendments to the § 801.1(a)(1) definition of “person” to require certain acquiring
persons to disclose additional information about their associates in Items 4 through 8 of
the HSR Form and to aggregate acquisitions in the same issuer across their associates
when making an HSR filing, as well as a ministerial change to § 801.1(d)(2). The
Commission also proposes a new exemption, § 802.15, which would exempt the
acquisition of 10% or less of an issuer’s voting securities when the acquiring person does
not already have a competitively significant relationship with the issuer. Finally, the
Commission proposes explanatory and ministerial changes to the Rules, as well as
necessary amendments to the HSR Form and Instructions to effect the proposed changes.
Section 7A(d)(1) of the Clayton 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 determine whether the proposed transaction may, if
consummated, violate the antitrust laws. In addition, Section 7A(d)(2) of the Clayton 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, exempt classes of transactions that are not likely to violate the antitrust laws,
and prescribe such other rules as may be necessary and appropriate to carry out the
purposes of Section 7A.

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The Commission notes that comments it receives in response to this NPRM may
also inform the Advanced Notice of Proposed Rulemaking (ANPRM) published in the
Federal Register at the same time as this NPRM.
Part 801—Coverage Rules
§ 801.1 Definitions.
§ 801.2 Acquiring and acquired persons.
§ 801.12 Calculating percentage of voting securities.
Part 802—Exemption Rules
§ 802.15 De minimis acquisitions of voting securities.
Part 803—Transmittal Rules
Appendix A to Part 803—Notification and Report Form for Certain Mergers and
Acquisitions
Appendix B to Part 803—Instructions to the Notification and Report Form for Certain
Mergers and Acquisitions
Background
The HSR premerger notification program enables the Agencies to determine
which acquisitions are likely to be anticompetitive and to challenge them before they are
consummated when remedial action is most effective. Under the HSR program, the
Agencies typically evaluate thousands of transactions every year. Given the large number
of HSR filings submitted each year, the Agencies must use their resources effectively to
focus on transactions that may harm competition. The Agencies have a strong interest in
receiving HSR filings that contain enough information to conduct a preliminary
assessment of whether the proposed transaction presents competition concerns, while at
the same time not receiving filings related to acquisitions that are very unlikely to raise
competition concerns. In the Agencies’ experience, two particular categories of filings
make it difficult for the Agencies to focus their resources effectively:
6

•

Filings for acquisitions by certain investment entities. First, due to changes in
investor structure and behavior since the HSR Act and Rules went into effect,
filings from certain investment entities do not capture the complete
competitive impact of a transaction. When certain investment entities file as
acquiring persons, the Rules and Form do not currently require the disclosure
of substantive information concerning both the complete structure of the
acquiring person and the complete economic stake being acquired in an issuer.

•

Filings for acquisitions of 10% or less of an issuer. At the same time, the
Agencies regularly receive filings involving proposed acquisitions, not solely
for the purpose of investment, that would result in the acquiring person
holding 10% or less of an issuer. In the Agencies’ experience, these filings
almost never present competition concerns. 1

To help the Agencies use their resources more effectively, the Commission
proposes to address both issues in this proposed rulemaking. To obtain more complete
filings from investment entities filing as acquiring persons, the Commission proposes
amending the definition of person in § 801.1(a)(1) to include “associates,” a term that is
already defined in the Rules. This proposed change would require certain acquiring
persons to disclose additional information about their associates in Items 4 through 8 of
the HSR Form and to aggregate acquisitions in the same issuer across their associates

1

From FY 2001 to FY 2017, the Agencies received a total of 26,856 HSR filings, including 1,804 for
acquisitions of 10% of less of outstanding stock. During that same period, the Agencies did not challenge
any acquisitions involving a stake of 10% or less. Occasionally, the Agencies will require merging parties
to divest or make passive small investments in competitors that also carry rights to influence business
decisions at the firm. See U.S. v. AT&T Inc. and Dobson Communications Corp., 1:07-cv-01952 (D.D.C.
2007) (parties divested small stakes that carried significant rights to control core business decisions, obtain
critical confidential competitive information, and share in profits at a rate significantly greater than the
equity ownership share).

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when making an HSR filing. In addition, the Commission proposes a new exemption,
§ 802.15, which would exempt the acquisition of 10% or less of an issuer’s voting
securities when the acquiring person does not already have a competitively significant
relationship with the issuer. Finally, the Commission proposes explanatory and
ministerial changes to the Rules, as well as necessary amendments to the HSR Form and
Instructions to effect the proposed changes.
I.

Proposed Changes to Section 801.1 Definitions
A.

Proposed Change to the Section 801.1(a)(1) Definition of “Person”

Since the promulgation of the Rules in 1978, the investment landscape has
undergone vast changes, including the proliferation of investment entities such as
investment funds and master limited partnerships (“MLPs”). Both investment funds and
MLPs facilitate investment through structures utilizing limited partnerships and limited
liability companies. The Rules define limited partnerships and limited liability companies
as “non-corporate entities,” and non-corporate entities are their own Ultimate Parent
Entity (“UPE”) under the Rules when no one holds the right to 50% or more of the profits
or assets upon dissolution. Thus, although each non-corporate entity exists within an
overall structure of a “family” of funds or MLP, each is typically its own UPE under the
HSR Rules. For instance, Parent Fund creates Fund Vehicle 1, Fund Vehicle 2, and Fund
Vehicle 3, each a non-corporate entity. No one controls these non-corporate entities, so
each fund vehicle is its own UPE even though they exist within the same family of funds.
The same is true when no one controls non-corporate entities within a MLP structure;
although they exist within the same MLP, each non-corporate entity is its own UPE.

8

Treating these non-corporate entities as separate entities under HSR is often at
odds with the realities of how fund families and MLPs are managed. In the fund context,
a fund vehicle typically has an entity that manages how that fund vehicle will invest, 2 and
this investment manager very often manages the investments of other fund vehicles
within the same family of funds. As a result, Fund Vehicle 1, Fund Vehicle 2, and Fund
Vehicle 3 might well have the same Investment Manager 3 and that Investment Manager
can use Fund Vehicle 1, Fund Vehicle 2, and Fund Vehicle 3 to make separate
investments in different issuers or the same issuer. MLPs, for their part, often have
similar structures involving non-corporate entities that are their own UPEs but under
common management. 4
When non-corporate entities are their own UPEs but under common management
as described above, this creates two scenarios in which it is difficult for the Agencies to
assess the competitive impact of a transaction based on the HSR filing. The first involves
filings from non-corporate entity UPEs as acquiring persons that do not contain a
complete enough picture of the investment fund or MLP. The Commission first addressed
this category of filings in 2011 when it created the “associates” concept. 5 Before that
time, filings from non-corporate entity UPEs within families of funds and MLPs
contained limited substantive information because non-corporate entity UPEs were not
required to disclose information on any other entity within the investment structure. For
instance, if Fund Vehicle 1 made a filing for a 100% interest in an Issuer, and Fund

2

As defined in 16 CFR 801.1(d)(2).
As defined in 16 CFR 801.1(d)(2).
4
As defined in 16 CFR 801.1(d)(2); the management of MLPs does not have to involve investment
management.
5
76 FR 42472 (July 19, 2011).
3

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Vehicle 2, under common investment management with Fund Vehicle 1, held 100% of a
competitor of the Issuer, Fund Vehicle 2’s holding was not disclosed in the filing because
Fund Vehicle 1 was its own UPE. A filing such as the one from Fund Vehicle 1 was of
limited use to the Agencies because it did not reveal relevant holdings within the same
family of funds. Filings received from newly-formed fund vehicles, which did not yet
own anything, were of even less use because these filings were largely blank. Filings
from non-corporate entities that were their own UPEs within MLP structures raised the
same issues.
In light of these issues, the Commission determined that updates to the HSR Form
would allow the Agencies to “receive the information they need to get a complete picture
of potential antitrust ramifications of an acquisition.” 6 Accordingly in 2010, 7 the
Commission introduced and proposed to define the term “associates” to capture
information in the HSR Form from certain entities that are under common management
with the acquiring person. The 2011 final rule 8 required certain acquiring persons to
disclose in their HSR filings what their associates hold in entities that generate revenue in
the same NAICS codes as the target. With this change, any fund vehicle filing as an
acquiring person must look to its investment manager to determine what other fund
vehicles that investment manager manages. For instance, Fund Vehicle 1’s investment
manager also manages the investments of Fund Vehicle 2, making Fund Vehicle 1 and
Fund Vehicle 2 associates. Fund Vehicle 1 makes an HSR filing for a 100% interest in
Issuer Q. Fund Vehicle 2 controls Entity Y and has a minority position in Entity Z, both

6

Id.
75 FR 57111 (Sept. 17, 2010).
8
76 FR 42471 (July 19, 2011).
7

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of which report in the same NAICS code as Issuer Q. Fund Vehicle 1 must therefore
disclose in its HSR filing Fund Vehicle 2’s controlling interest in Y and minority interest
in Z. Non-corporate entity UPEs within MLP structures must disclose the same
information about their associates when filing as acquiring persons.
Although this additional information has been helpful in assessing the competitive
impact of a transaction, it is too limited to provide the Agencies with a sufficient
overview of investment funds and MLPs as acquiring persons. For instance, the
information currently required from associates is limited to controlling or minority
interests in entities that report in the same NAICS codes as the entity being acquired. In
the Agencies’ experience, competitors sometimes use different NAICS codes to describe
the same line of business, particularly in the case of companies engaged in technologybased businesses. In addition, associates currently are not required to provide any
substantive information, such as financials or revenues, about the entities they control,
making it difficult for the Agencies to determine whether an entity within an associate
might create a competitive concern in a given transaction.
It is also difficult for the Agencies to understand the potential competitive impact
of a transaction when a filing does not represent the total economic stake being acquired
in the same issuer. For instance, Investment Manager uses Fund Vehicle 1 to acquire 6%
of Issuer D and Fund Vehicles 2 and 3 to each acquire 3% of Issuer D. Only Fund
Vehicle 1’s acquisition of 6% of Issuer D’s voting securities is large enough to cross the
$50 million (as adjusted) size of transaction threshold. Fund Vehicle 1 makes an HSR
filing, but because it is its own UPE, it need not disclose the interests of Fund Vehicles 2
and 3 in Issuer D. As a result, the filing does not reflect the 12% aggregate interest in

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Issuer D of the fund vehicles under common investment management. Another common
example arises when Investment Manager uses Fund Vehicle 1, Fund Vehicle 2, and
Fund Vehicle 3 to each acquire 2% in Issuer D. If none of these acquisitions of 2% is
large enough to cross the $50 million (as adjusted) size of transaction threshold, the
Agencies receive no HSR filing, even though the fund vehicles hold an aggregate 6% of
Issuer D. Although more rare, both of these scenarios can also play out in the MLP
context when non-corporate entity UPEs within the MLP structure make acquisitions in
the same issuer.
To help the Agencies accurately assess the potential competitive impact of a
pending transaction in these scenarios, the Commission proposes to amend the
§ 801.1(a)(1) definition of “person” to include associates, such that it would read as
follows: “Except as provided in paragraphs (a) and (b) of § 801.12, the term person
means (a) an ultimate parent entity and all entities which it controls directly or indirectly;
and (b) all associates of the ultimate parent entity.”
This proposed change would require a non-corporate entity UPE filing as an
acquiring person to disclose additional information from its associates in Items 4 through
8 of the Form 9 and to aggregate acquisitions in the same issuer across its associates.
Under the proposed rule, a non-corporate entity UPE filing as an acquiring person
would be part of a new, larger Acquiring Person. This Acquiring Person would include
non-corporate entity UPE, its associates (which would also be UPEs) and the entity that
manages non-corporate entity UPE and its associates (the “managing entity”). 10 The

9

For acquired persons, Items 5 through 7 of the Form will still be limited to the assets, voting securities, or
non-corporate interests being sold.
10
The same would be true for an Acquired Person under the proposed rule.

12

managing entity would make the filing on behalf of the Acquiring Person, identifying
itself in proposed Item 1(a) of the Form, and identify the relevant UPE making the
acquisition in proposed Item 1(c) of the Form. 11 If two UPEs within the same Acquiring
Person are making reportable acquisitions in the same issuer, the managing entity can
choose which one will be the relevant UPE for purposes of the form. The relevant UPE
can also file on behalf of the managing entity, as noted in proposed Item 1(c) of the
Form. For example:
Hypothetical #1
•

Fund Vehicles 1, 2 and 3, each non-corporate entities and their own UPEs, exist
within the same family of funds. Fund Vehicles 1, 2 and 3 have the same
Investment Manager, and are thus associates. Fund Vehicle 1 will acquire 6% of
Issuer D valued at $100 million, Fund Vehicle 2 will acquire 6% of Issuer D
valued at $100 million and Fund Vehicle 3 will acquire 3% of Issuer D valued at
$50 million. The Acquiring Person includes Fund Vehicles 1, 2 and 3, which are
all UPEs, and Investment Manager.
o Fund Vehicle 1 does not control any operating companies.
o Fund Vehicle 2 controls Portfolio Company A and Portfolio Company B.
Portfolio Company B was acquired two years ago and reports in the same
NAICS code as Issuer D.
o Fund Vehicle 3 controls Portfolio Company C, which does not report in
the same NAICS code as Issuer D. Fund Vehicle 3 also holds a minority
position in several entities, M, N, and O, which report in the same NAICS
code as Issuer D.

•

Investment Manager files on behalf of the Acquiring Person for the 15%
aggregate interest in Issuer D valued at $250 million by placing its name in Item
1(a) of the Form. Although Investment Manager could designate Fund Vehicle 1
or 2 as the UPE making the acquisition, Investment Manager indicates in Item
1(c) of the filing that Fund Vehicle 1 is making the acquisition. Fund Vehicle 1
can also indicate in Item 1(c) of the Form that it is filing on Investment Manager’s
behalf. The filing must include the following:
o Item 4(a): this item requires the Central Index Key (CIK) number of all
entities within the Acquiring Person, which now includes Investment

11

In the case of an Acquired Person, the managing entity would make the filing on behalf of the Acquired
Person, identifying itself in proposed Item 1(a) of the Form, and identifying the selling UPE in proposed
Item 1(c) of the Form. The selling UPE could also indicate in Item 1(c) of the Form that it is filing on the
managing entity’s behalf.

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o

o

o

o

o

o

o

Manager, Fund Vehicle 1, Fund Vehicle 2, Fund Vehicle 3, Portfolio
Company A, Portfolio Company B, and Portfolio Company C.
Item 4(b): this item requires financials from the Acquiring Person, which
now includes Investment Manager, Fund Vehicle 1, Fund Vehicle 2, Fund
Vehicle 3, Portfolio Company A, Portfolio Company B, and Portfolio
Company C.
Item 4(c): this item requires responsive documents from the Acquiring
Person, which now includes Investment Manager, Fund Vehicle 1, Fund
Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio Company B,
and Portfolio Company C.
Item 4(d): this item requires responsive documents from the Acquiring
Person, which now includes Investment Manager, Fund Vehicle 1, Fund
Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio Company B,
and Portfolio Company C.
Item 5: this item requires revenues by NAICS and NAPCS codes for the
Acquiring Person, which now includes Investment Manager, Fund Vehicle
1, Fund Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio
Company B, and Portfolio Company C.
Item 6: Items 6(a) and 6(b) require information from the Acquiring
Person, which now includes Investment Manager, Fund Vehicle 1, Fund
Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio Company B,
and Portfolio Company C. Item 6(c) also requires information from the
Acquiring Person, which now includes Investment Manager, Fund Vehicle
1, Fund Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio
Company B, and Portfolio Company C. However, the information
required by Item 6(c) is still limited to minority holdings in entities that
report in the same NAICS code(s) as the target, here M, N and O.
Item 7: this item requires all responsive information from the Acquiring
Person, which now includes Investment Manager, Fund Vehicle 1, Fund
Vehicle 2, Fund Vehicle 3, Portfolio Company A, Portfolio Company B,
and Portfolio Company C. However, the information required by Item 7 is
still limited to entities that report in the same NAICS code(s) as the target,
here Portfolio Company B.
Item 8: this item requires information on prior acquisitions within the last
five years by the Acquiring Person, which now includes Investment
Manager, Fund Vehicle 1, Fund Vehicle 2, Fund Vehicle 3, Portfolio
Company A, Portfolio Company B, and Portfolio Company C. However,
the information required by Item 8 is still limited to entities that report in
the same NAICS code(s) as the target, here Portfolio Company B.

Hypothetical #2
•

MLP creates LP1, LP2, and LP3, each a non-corporate entity and its own UPE, to
separately hold the MLP’s investments. LP1, LP2 and LP3 have the same
Manager, and are thus associates. LP1 will acquire 100% of Issuer R valued at

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$500 million. LP1 is the UPE but the Acquiring Person includes Manager, LP2
and LP3.
o LP1 controls two operating companies, OpCo 1 and OpCo 2, which report
in the same NAICS code as Issuer R. OpCo 1 was acquired 10 years ago
and OpCo 2 was acquired 3 years ago.
o LP2 controls OpCo 3, which reports in the same NAICS code as Issuer R
and was acquired 1 year ago, and OpCo 4, which does not report in the
same NAICS code as Issuer R.
o LP3 holds minority positions in OpCo 5 and OpCo 6, and each reports in
the same NAICS code as Issuer R.
•

Manager places its name in Item 1(a) of the Form to file on behalf of the
Acquiring Person for the 100% interest in Issuer R, and indicates in Item 1(c) of
the Form that LP1 is making the acquisition. LP1 can also indicate in Item 1(c)
that it is filing on Manager’s behalf. The filing must include the following:
o Item 4(a): this item requires the CIK number of all entities within the
Acquiring Person, which now includes Manager, LP1, LP2, LP3, OpCo 1,
OpCo 2, OpCo 3 and OpCo 4.
o Item 4(b): this item requires financials from the Acquiring Person, which
now includes Manager, LP1, LP2, LP3, OpCo 1, OpCo 2, OpCo 3 and
OpCo 4.
o Item 4(c): this item requires responsive documents from the Acquiring
Person, which now includes Manager, LP1, LP2, LP3, OpCo 1, OpCo 2,
OpCo 3 and OpCo 4.
o Item 4(d): this item requires responsive documents from the Acquiring
Person, which now includes Manager, LP1, LP2, LP3, OpCo 1, OpCo 2,
OpCo 3 and OpCo 4.
o Item 5: this item requires revenues by NAICS and NAPCS codes for the
Acquiring Person, which now includes Manager, LP1, LP2, LP3, OpCo 1,
OpCo 2, OpCo 3 and OpCo 4.
o Item 6: Items 6(a) and 6(b) require information from the Acquiring
Person, which now includes Manager, LP1, LP2, LP3, OpCo 1, OpCo 2,
OpCo 3 and OpCo 4. Item 6(c) also requires information from the
Acquiring Person, which now includes Manager, LP1, LP2, LP3, OpCo 1,
OpCo 2, OpCo 3 and OpCo 4. However, the information required by Item
6(c) is still limited to minority holdings in entities that report in the same
NAICS code(s) as the target, here OpCo 5 and OpCo 6.
o Item 7: this item requires all responsive information from the Acquiring
Person, which now includes Manager, LP1, LP2, LP3, OpCo 1, OpCo 2,
OpCo 3 and OpCo 4. However, the information required by Item 7 is still
limited to entities that report in the same NAICS code(s) as the target, here
OpCo 1, OpCo 2, and OpCo 3.
o Item 8: this item requires information on prior acquisitions within the last
five years by the Acquiring Person, which now includes Manager, LP1,
LP2, LP3, OpCo 1, OpCo 2, OpCo 3 and OpCo 4. However, the
information required by Item 8 is still limited to entities that report in the
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same NAICS code(s) as the target, here OpCo 2 and OpCo 3, but OpCo 1
would not be listed because it was acquired more than five years ago
As these examples illustrate, the proposed change to § 801.1(a)(1) would require a
non-corporate entity UPE filing as an acquiring person to disclose more substantive
information about its associates. The additional information required by the Form would
be of tremendous value to the Agencies in assessing the potential competitive impact of a
pending transaction. Specifically, the proposed changes to Items 4, 5 and 6(a) would give
the Agencies a much better picture of what entities are under common management. The
proposed changes to Item 6(b) would provide a clearer picture of the ways in which the
entities within the acquiring person are connected, both within the investment structure
and beyond. Proposed Item 8 would provide more complete information on entities
within the acquiring person that have made acquisitions in the same industry as the
target. 12 All of this additional information would give the Agencies a much more
complete picture of who is making the filing in the case of investment funds and MLPs
filing as acquiring persons.
The additional information concerning acquisitions made by a non-corporate
entity UPE’s associates in the same issuer would also be of great value to the Agencies.
The proposed change to § 801.1(a)(1) would give the Agencies a much clearer
understanding of the total economic stake being acquired in a single issuer by entities
under common management. In some cases, looking across a non-corporate entity UPE’s
associates for acquisitions in the same issuer will result in a filing when one would not
have been required previously. For instance, in a scenario where associates Fund Vehicle

12

There would be no change to the information Items 6(c) and 7 require, because those items already
require information from associates. Each of these items would, however, be consolidated in the HSR
Instructions and Form to reflect the new definition of “person,” as explained below.

16

1, Fund Vehicle 2, and Fund Vehicle 3 will each acquire 2% of Issuer D for $40 million,
the Agencies currently do not receive a filing because none of the three $40 million
acquisitions is large enough to cross the $50 million (as adjusted) size of transaction
threshold. Under the proposed rule, the Agencies would now receive a filing for the
aggregate 6% interest valued at $120 million (assuming an exemption does not apply). 13
The Commission acknowledges that the proposed change to § 801.1(a)(1) would
result in more filings and an increased burden for certain acquiring persons. Noncorporate entity UPEs within families of funds and MLPs would have to provide
significant additional information on behalf of their associates under the proposed
change. These entities are, however, already accustomed to looking into the holdings of
those associates for filings where they are acquiring persons because some information
about associates’ holdings must be provided even under the current Rules. Given that
these entities already conduct such inquiries, the Commission believes requiring
additional information about entities that have already been identified should be
manageable. The breadth of certain items will still be limited, and the burden should
lessen after the first inquiry under the new rule. Nevertheless, the Commission
acknowledges that there might be other ways to achieve the same result. The Commission
invites comments on alternative ways the Agencies could obtain this necessary
information that would result in a more limited burden for investment funds and MLPs
filing as acquiring persons.
The proposed change to § 801.1(a)(1) would result in fewer filings and a reduced
burden for certain other acquiring persons. The proposed rule would streamline the

13

In addition, certain acquiring persons will also be much more likely to meet the size of person test when
including information about their associates as required by the proposed rule.

17

number of filings and fees from families of funds and MLPs. For instance, in the scenario
where associates Fund Vehicle 1, Fund Vehicle 2, and Fund Vehicle 3 will each acquire
7% of Issuer D for $200 million, each currently must make a filing and pay a separate
$125,000 filing fee (assuming no exemptions apply). Under the proposed rule, the
Agencies would receive one filing for 21% of Issuer D valued at $600 million and one
$125,000 filing fee. In addition, the proposed rule would eliminate the need for a filing in
the alternative. If the Investment Manager of associates Fund 1 and Fund 2 has not yet
determined which of those funds should be the vehicle for a particular investment, the
need to choose one for HSR filing purposes becomes moot under the proposed rule,
eliminating the potential need to make two filings with two separate filing fees.
The Commission also proposes an additional reduction in burden for acquired
persons. The HSR Form already limits what acquired persons must report in Items 5
through 7 to information on those assets, voting securities, and non-corporate interests
being acquired in the transaction at issue. The limitation for acquired persons in these
items is an acknowledgment that only what is being sold is relevant to the Agencies’
competition analysis. This is also the case for the financial information required in Items
4(a) and 4(b), and the Commission therefore proposes amending the HSR Instructions to
create a similar limit for acquired persons with respect to these items. Under the proposed
changes, an acquired person would provide relevant CIK numbers in response to Item
4(a) or financials in response to Item 4(b) only for (1) the assets, voting securities and
non-corporate interests being acquired in the transaction at issue, and (2) the UPE of
those assets, voting securities and non-corporate interests. This proposed amendment to
the HSR Instructions would significantly limit what non-corporate entity UPEs within

18

families of funds and MLPs would have to provide as acquired persons in response to
Items 4(a) and 4(b) and would not adversely affect the Agencies’ competitive analysis.
Finally, the Commission also acknowledges that certain non-corporate entity
UPEs within families of funds and MLPs and their associates may be structured as index
funds, exchange-traded funds (ETFs) or the like. Since these entities base their
investments on an index, it is possible that it is not appropriate to apply the proposed
change to § 801.1(a)(1) to these entities. The Commission invites comments on whether
index funds, ETFs or the like should be differentiated under the proposed rule.
B.

Proposed Changes to Section 801.1(d)

Along with the proposed change to § 801.1(a)(1), the Commission also proposes
conforming changes to the definition of associate in § 801.1(d)(2). Under the current
definition, associate is only relevant to Items 6 and 7 of the HSR Form and to acquiring
persons. 14 But the proposed change to the § 801.1(a)(1) definition of person would apply
the associates concept more broadly in the HSR Form and to both acquiring and acquired
persons. The Commission therefore proposes to eliminate the phrase “For purposes of
Items 6 and 7” from § 801.1(d)(2), capitalize the subsequent “An” in § 801.1(d)(2) and
include “or acquired” in § 801.1 (d)(2), § 801.1 (d)(2)(A) and § 801.1 (d)(2)(B) to reflect
this proposed change.
II.

Proposed Section 802.15: De Minimis Acquisitions of Voting Securities
To use their resources as effectively as possible, the Agencies have a strong

interest not only in receiving HSR filings that contain sufficient information to assess
whether proposed transactions present real competition concerns, but also in eliminating

14

16 CFR 801.1(d)(2).

19

filings for categories of acquisitions that are unlikely to create competitive concerns. In
1996, the Commission acknowledged this concern in issuing final rules exempting certain
ordinary course transactions, as well as certain types of acquisitions of realty and carbonbased mineral reserves. 15 The Commission explained, “[t]hese rules are designed to
reduce the compliance burden on the business community by eliminating the application
of the notification and waiting requirements to a significant number of transactions that
are unlikely to violate the antitrust laws. They will also allow the enforcement agencies to
focus their resources more effectively on those transactions that present the potential for
competitive harm.” 16
Under the same rationale, the Commission has long contemplated the exemption
of acquisitions of 10% or less of the voting securities of an issuer. These kinds of
acquisitions can take many forms. The most typical is when an entity acquires 10% or
less of an issuer in order to provide that issuer with needed capital. Sometimes certain
shareholders of the target will acquire less than 10% of the buyer’s voting securities as
consideration for the transaction (typically called shareholder backside acquisitions).
Except for a few instances when a shareholder backside acquisition of 10% or less of an
issuer’s voting securities was linked to a larger transaction that presented competitive
concerns, 17 the Commission has not sought to block any acquisition of 10% or less of an
issuer’s voting securities.
Recognizing that some acquisitions of 10% or less are less likely than others to
raise competitive concerns, the Act already includes an exemption for acquisitions of

15

61 FR 13666 (Mar. 28, 1996).
61 FR 13666 (Mar. 28, 1996).
17
See, e.g., In re Time Warner, Inc., et al., Docket No. C-3709, (Feb. 7, 1997).
16

20

10% or less of the voting securities of an issuer made “solely for the purpose of
investment.” 18 This exemption is codified in § 802.9, 19 and § 801.1(i)(1) defines the term
“solely for the purpose of investment” so that filing parties may determine whether
§ 802.9 is available. “Voting securities are held or acquired ‘solely for the purpose of
investment’ if the person holding or acquiring such voting securities has no intention of
participating in the formulation, determination, or direction of the basic business
decisions of the issuer.” 20
The Statement of Basis and Purpose for the original 1978 Rules (“1978 SBP”)
lays out specific factors that further illuminate the § 801.1(i)(1) definition. “[M]erely
voting the stock will not be considered evidence of an intent inconsistent with investment
purpose. However, certain types of conduct could be so viewed. These include but are not
limited to: (1) Nominating a candidate for the board of directors of the Issuer; (2)
proposing corporate action requiring shareholder approval; (3) soliciting proxies; (4)
having a controlling shareholder, director, officer or employee simultaneously serving as
an officer or director of the Issuer; (5) being a competitor of the Issuer; or (6) doing any
of the foregoing with respect to any entity directly or indirectly controlling the Issuer.
The facts and circumstances of each case will be evaluated whenever any of these actions
have been taken by a person claiming that voting securities are held or acquired solely for
the purpose of investment and thus not subject to the act’s requirements.” 21
The Agencies have interpreted these factors narrowly: when an acquiring person
takes any of the enumerated actions or is a competitor of the issuer, § 802.9 is generally

18

15 USC 18a(c)(9).
16 CFR 802.9.
20
16 CFR 801.1(i)(1).
21
43 FR 33450, 33465 (July 31, 1978).
19

21

not available. 22 On the other end of the spectrum, § 802.9 is clearly available if the
acquiring person plans to do nothing but hold the stock. Given the changes in investor
behavior since the HSR Act was passed, 23 however, a great deal of potential shareholder
engagement involves more than merely holding (and potentially selling) stock, but does
not encompass what the 1978 SBP discusses. 24
Notably, some argue that communications between investors and management
encourage corporate accountability to shareholders, 25 and that HSR filing requirements
(and attendant obligations to provide notice to the issuer prior to purchase of the shares)
might chill this beneficial interaction, 26 particularly since, depending on the degree of

22

Letter from Thomas J. Campbell, Dir., Bureau of Competition, FTC, to Michael Sohn, Esq., Arnold &
Porter (Aug. 19, 1982) (on file with the 6th report to Congress).
23
See Scott Hirst & Lucian Bebchuk, The Specter of the Giant Three, 99 B.U. L. Rev. 721, 725-26 (2019).
(In 1950, U.S. equities were predominantly held by households, with institutional investors accounting for
only about six percent; now institutional investors hold 65 percent of U.S. equities); and then S&P Dow
Jones Indices, Comment, Re: FTC Hearing #8: Competition and Consumer Protection: Holdings of NonControlling Ownership Interests in Competing Companies, (Jan. 15, 2019),
https://www.ftc.gov/system/files/documents/public_comments/2019/01/ftc-2018-0107-d-0015-163643.pdf,
at 1 (“Fifty years ago, there were no index funds; all institutional (and retail) asset management was
conducted on an active basis. Today, we estimate that between 20 to 25 percent of the U.S. stock market is
held by index funds.”).
24
See, e.g., Blackrock, Investment Stewardship, Engagement Priorities for 2020,
https://www.blackrock.com/corporate/literature/publication/blk-stewardship-priorities-final.pdf (identifying
and describing board quality, environmental risk and opportunities, corporate strategy and capital
allocation, compensation that promotes long-termism, and human capital management as engagement
priorities); Vanguard Investment Stewardship 2019 Annual Report, https://about.vanguard.com/investmentstewardship/perspectives-and-commentary/2019_investment_stewardship_annual_report.pdf (discussing
board composition (including diversity of gender, race and ethnicity) oversight of strategy and risk
(including environmental risk), structure of executive compensation, and governance structures to support
and ensure accountability of a company’s board and management to shareholders); and then State Street
Global Advisors Stewardship Report 2018-2019, https://www.ssga.com/librarycontent/products/esg/annual-asset-stewardship-report-2018-19.pdf (describing engagement with boards and
management teams, including, among other issues, “fearless girl campaign” to increase diversity of boards,
“climate risk and reporting”, ethical issues in the pharmaceutical industry, including marketing of addictive
substances, genetic engineering, and the use of personal data).
25
See David Hirschmann, Comment, FTC Hearings on Competition and Consumer Protection in the 21st
Century, (Dec. 6, 2018),
https://www.ftc.gov/system/files/documents/public_events/1422929/ftc_hearings_session_8_transcript_126-18_0.pdf, at 102 (“Engagement allows management to communicate with their shareholder base as they
implement strategies to generate long-term growth” and is “important for healthy capital markets.”).
26
See Council of Institutional Investors and the Managed Fuds Association, Comment, Re: Competition
and Consumption Protection in the 21st Century Hearings, Project Number P181201 – Investment
Community Request for HSR Reform, (Aug. 13, 2018),

22

shareholder engagement, it can be quite difficult to determine whether filing parties can
rely on the § 802.9 exemption. For instance, a discussion between shareholders and
company executives may begin with the amount of compensation each executive
receives, but then evolve into how each executive’s compensation will be determined by
the company’s performance. This discussion on a seemingly innocuous topic may touch
on basic business decisions, precluding use of the § 802.9 exemption. In the Agencies’
experience, even the simplest of topics can present subtleties that complicate whether
§ 802.9 might exempt an acquisition of 10% or less of an issuer’s voting securities.
Over the years, the Agencies have considered revising § 802.9 in order to provide
clearer guidance on when the acquisition of 10% or less of an issuer’s voting securities is
exempt from HSR filing requirements. In 1988, the Commission initiated a notice and
comment proceeding on a proposed approach and two alternative approaches:
The principal proposal would exempt from the premerger notification obligations
all acquisitions of 10% or less of an issuer's voting securities on the grounds that
such acquisitions are unlikely to violate the antitrust laws. The alternative
proposals would alter existing notification procedures for acquisitions of 10% or
less of an issuer’s voting securities. One would permit the purchase, but require
that the securities be placed in escrow pending antitrust review; the other would
eliminate the reporting requirement imposed on the target firm, thus freeing the
acquiror of its obligation to give the target prior notice. 27

https://www.ftc.gov/system/files/documents/public_comments/2018/08/ftc-2018-0048-d-0010-147719.pdf,
at 1-2, and 7 (“[T]he investment community is concerned that the Commission’s increasingly narrow
interpretation and application of the investment-only exemption under the HSR Act is imposing an undue
regulatory burden and unnecessary costs on institutional investors, such as employee pension funds,
charitable foundations and university endowments. That burden undermines the strong public policy in
favor of management-shareholder communications, involves significant and unnecessary costs, and is not
justified by the Commission’s mission to protect competition.” … “CII and MFA are concerned that the
current narrow application of the investment-only exemption is interfering with an animating policy
objective of the federal securities laws to ensure a free flow of information and disclosure from issuers of
securities to the investing public.”).
27
53 FR 36831 (Sept. 22, 1988).

23

The Commission’s principal proposal in 1988 was a new exemption, § 802.24,
that would have subsumed § 802.9 “by eliminating the filing requirement for all
acquisitions of 10 percent or less of an issuer's voting securities, regardless of the intent
of the acquired person.” Although the Commission had rejected calls to ignore
investment intent in 1978 when the original Rules were promulgated, it proposed to
exempt all acquisitions of 10% or less of an issuer’s voting securities based on ten years
of experience with reviewing those filings that were not solely for the purpose of
investment. “It is not possible to say that voting securities acquisitions of 10 percent or
less, or 5 percent or less, cannot violate the antitrust laws. The proposed exemption is
rather based on the evidently low likelihood that ‘the class of transactions’ will violate
the antitrust laws.” 28
But the Commission also considered alternative proposals that would more
directly address concerns related to other aspects of the Act that could increase the cost of
acquiring shares, specifically the requirement to wait for the expiration of the waiting
period before acquiring shares, and the requirement to notify the target of the intended
acquisition. 29 As a result, the Commission proposed two alternative approaches. The first,
proposed § 801.34, “would permit acquirors to purchase, but not take possession of, up to
10 percent of an issuer’s voting securities without filing a notification. The shares
purchased would be placed in escrow and voted by the escrow agent in proportion to the
votes cast by all other shares. The acquiror would be required to file and observe the
waiting period prior to purchasing more than 10 percent of an issuer’s voting securities or

28

Id. at 36841.
“Acquirors are reluctant to file premerger notifications because both the delay imposed by the waiting
period and informing the target could increase the cost to them of acquiring the issuer's voting securities.”
53 FR 36831, 36840 (Sept. 22, 1988).

29

24

prior to taking the shares out of escrow.” 30 The second proposal was an optional
notification for acquisitions of 10% or less of the voting securities of an issuer. “This
optional system would require the acquiror to submit specified public documents
describing the entity to be acquired, but would not require that the issuer be given notice
of the intended acquisition.” 31
The 1988 proposed rulemaking received eighteen comments. 32 Some encouraged
the Commission to move forward with the principal proposal that would exempt all
acquisitions of 10% or less of an issuer’s voting securities regardless of investment intent.
Several comments in favor of the principal proposal agreed with the Commission’s
assertion in the proposed rulemaking that acquisitions of 10% or less of an issuer’s voting
securities were unlikely to violate the antitrust laws. 33 In addition, some of the comments
noted that the proposed rule would “eliminate the incentive to avoid compliance with the

30

53 FR 36831, 36,842 (Sept. 22, 1988).
53 FR at 36843.
32
All comments are available at https://www.ftc.gov/policy/public-comments/2020/08/initiative-122.
33
See Robert S. Pirie, Comment, RE: Proposed Rulemaking Concerning Premerger Notification under
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Oct. 18, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/10/p812937hsrrulemakingcomment02.
pdf; James E. Knox, Comment, RE: Proposed Rulemaking Concerning Premerger Notification under HartScott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Nov. 8, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment07.
pdf; Irving Scher, Comment, RE: Proposed Rulemaking Concerning Premerger Notification under HartScott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Nov. 21, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment09.
pdf; John A. Reid, Jr., Comment, Re: Proposed Changes to Premerger Notification Rules, 53 FR 36831,
(Nov. 18, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment11
-2.pdf; Howard E. Steinberg, Comment, Re: Proposed Changes to Premerger Notification Rules, 53 FR
36831, (Nov. 21, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment12.
pdf; and then William J. Kolasky, Jr., Comment, Re: Comments Submitted by Wilmer, Cutler & Pickering
Regarding Proposed Amendments to the Hart-Scott-Rodino Improvement Act of 1976, 53 FR 36831, (Nov.
21, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment13.
pdf.
31

25

H-S-R Act without prejudicing antitrust enforcement efforts” 34 and benefit the
Commission through the “freeing up of Commission resources currently expended on
compliance investigations regarding transactions that lack antitrust significance.” 35
Several comments also noted that the proposed rule would ease conflicts with the
securities laws. A company wrote that “by allowing the acquisition of securities under the
secrecy afforded by the securities laws, acquirors will be able to purchase stock at prices
that are not artificially inflated by the publicity which can be generated by an HSR Act
notification filing at the $15 million reporting threshold.” 36
Other comments noted concerns with the proposed rule. One company wrote:
The proposed exemption for a person who acquires up to 10% of the securities of
an issuer when such acquirer has the intent of influencing target’s management
(which is virtually always the case for an acquisition of 10% of an issuer’s stock)
is in diametric opposition to the fundamental purpose of the Act. Since power to
34

See Robert S. Pirie, Comment, RE: Proposed Rulemaking Concerning Premerger Notification under
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Oct. 18, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/10/p812937hsrrulemakingcomment02.
pdf, at 1. See also James E. Knox, Comment, RE: Proposed Rulemaking Concerning Premerger
Notification under Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Nov. 8, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment07.
pdf.
35
See Howard E. Steinberg, Comment, Re: Proposed Changes to Premerger Notification Rules, 53 FR
36831, (Nov. 21, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment12.
pdf, at 2. See also Robert S. Pirie, Comment, RE: Proposed Rulemaking Concerning Premerger
Notification under Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Oct. 18, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/10/p812937hsrrulemakingcomment02.
pdf; and then James E. Knox, Comment, RE: Proposed Rulemaking Concerning Premerger Notification
under Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Nov. 8, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment07.
pdf.
36
See James E. Knox, Comment, RE: Proposed Rulemaking Concerning Premerger Notification under
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Nov. 8, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment07.
pdf, at 2. See also Robert S. Pirie, Comment, RE: Proposed Rulemaking Concerning Premerger
Notification under Hart-Scott-Rodino Antitrust Improvements Act of 1976, 53 FR 36831, (Oct. 18, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/10/p812937hsrrulemakingcomment02.
pdf; and then William J. Kolasky, Jr., Comment, Re: Comments Submitted by Wilmer, Cutler & Pickering
Regarding Proposed Amendments to the Hart-Scott-Rodino Improvement Act of 1976, 53 FR 36831, (Nov.
21, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment13.
pdf.

26

influence the target’s management is the primary concern of Section 7, it is
beyond our comprehension why the FTC would exempt review for acquisitions of
up to 10% of an issuer’s stock when the acquisitions may be made for the purpose
of influencing management. 37
A trade association wrote: “The real thrust of the suggestion is not that the $15
million threshold test serves no antitrust purpose, but rather that the FTC finds it difficult
to force compliance by those who wish to make hostile tender offers. That, however, is
not by itself an appropriate reason for the rules change. Violations cannot be ignored.” 38
Members of Congress also weighed in on the proposed rulemaking. One argued
that filing requirements should be enforced instead of changed 39 while another argued
that the Agencies lacked the authority to create an exemption that would, in effect, render
irrelevant the statutory minimum threshold. 40 Representative James J. Florio (then
Chairman of the Subcommittee on Commerce, Consumer Protection, and
Competitiveness of the Committee on Energy and Commerce) wrote: “[t]he rulemaking
notice points out that Congress was definitely interested in subjecting some types of
acquisitions of 10 percent or less to premerger review. In light of this Congressional

37

See Dennis P. Codon, Comment, Re: Premerger Notification; Reporting and Waiting Period
Requirements, 53 FR 36831, (Nov. 7, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment06.
pdf, at 1.
38
See John. W. Hetherington, Comment, Re: 16 CFR Parts 801, 802, and 803 Premerger Notification;
Reporting and Waiting Period Requirements, 53 FR 36831, (Dec. 19, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/12/p812937hsrrulemakingcomment17.
pdf, at 2.
39
See Jim Sasser, Comment, Re: Premerger Notification, 53 FR 36831, (Oct. 25, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/11/p812937hsrrulemakingcomment08.
pdf, at 1, (“Indeed, I find the rationale for the proposed amendments flawed. The premerger notification
rules should not be relaxed because, as you say, there is too much incentive to avoid them; rather, they
should be strengthened.”).
40
See Jack Brooks, Comment, 53 FR 36831, (Dec. 9, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/12/p812937hsrrulemakingcomment14.
pdf, at 1, (“The proposal would, for all practical purposes, eliminate the $15 million premerger notification
threshold. I do not believe that Congress delegated authority to the Commission to repeal that statutory
notification threshold.”).

27

intent, I am puzzled by the Commission’s proposal to overrule Congressional intent by a
blanket exemption.” 41
The Commission did not issue a final rule.
Since 1988, the parameters of the HSR premerger notification program have
undergone considerable change. In 2000, Congress amended the Act to raise the
minimum reportability threshold from $15 million to $50 million, and at the same time
built in an automatic annual adjustment of all of the Act’s thresholds based on the change
in gross national product. Currently, a transaction must be valued at more than $94
million to be potentially reportable, and the parties to that transaction must have sales or
assets of at least $188 million and $18.8 million, respectively, unless the transaction is
valued at more than $376 million. The statutory thresholds have increased steadily since
2000, 42 which has reduced significantly the number of filings received by the Agencies. 43
Since 1988, the Commission has also gained over 30 years of additional
experience reviewing filings for acquisitions of 10% or less of an issuer’s voting
securities. Since the promulgation of the Rules in 1978, the Agencies have not challenged
a stand-alone acquisition of 10% or less of an issuer, and have rarely engaged in a
substantive initial review of a proposed acquisition of 10% or less of an issuer. 44 The
Commission believes that proposed acquisitions of 10% or less of an issuer should be
exempt when they are unlikely to violate the antitrust laws and that exempting this

41

See James J. Florio, Chairman, Comment, Re: Premerger Notification; Reporting and Waiting Period
Requirements, 53 FR 36831, (Oct. 12, 1988),
https://www.ftc.gov/system/files/documents/public_comments/1988/10/p812937hsrrulemakingcomment01.
pdf, at 2.
42
The thresholds have increased every year except for 2010. 75 FR 3468 (Jan. 21, 2010).
43
As a result of these changes, many acquisitions of small stakes that would have resulted in an HSR filing
prior to 2001 no longer trigger an HSR filing.
44
Note 1 supra.

28

category of acquisitions will allow the Agencies to better focus their resources on
transactions that create the potential for competition concerns. To achieve this goal, the
Commission proposes a new approach to exempt acquisitions of 10% or less of an
issuer’s voting securities under certain conditions. Proposed § 802.15 reads as follows:
§ 802.15 De minimis acquisitions of voting securities
An acquisition of voting securities shall be exempt from the requirements of the act
if as a result of the acquisition:
(a) the acquiring person does not hold in excess of 10% of the outstanding voting
securities of the issuer; and
(b)(i) the acquiring person is not a competitor of the issuer (or any entity within
the issuer);
(ii) the acquiring person does not hold voting securities in excess of 1% of the
outstanding voting securities (or, in the case of a non-corporate entity, in excess
of 1% of the non-corporate interests) of any entity that is a competitor of the
issuer (or any entity within the issuer);
(iii) no individual who is employed by, a principal of, an agent of, or otherwise
acting on behalf of the acquiring person, is a director or officer of the issuer (or of
an entity within the issuer);
(iv) no individual who is employed by, a principal of, an agent of, or otherwise
acting on behalf of the acquiring person, is a director or officer of a competitor of
the issuer (or of an entity within the issuer); and
(v) there is no vendor-vendee relationship between the acquiring person and the
issuer (or any entity within the issuer), where the value of sales between the
acquiring person and the issuer in the most recently completed fiscal year is
greater than $10 million in the aggregate.
Proposed § 802.15 exempts acquisitions that would result in the acquiring person
holding 10% or less of the issuer’s outstanding voting securities, unless the acquiring
person already has a competitively significant relationship with the issuer, such as where
the acquiring person operates competing lines of business, has an existing vertical
relationship with the issuer, or employs or is otherwise represented by an individual who
29

is an officer or director of the issuer or a competitor. Because these types of relationships
render even a small stake potentially competitively significant, the Commission proposes
to continue to receive filings for any such acquisitions that are not exempt under § 802.9.
Over the last several years, there has been ongoing discussion of the impact of a
single entity holding small percentages of voting securities in competitors within the
same industry, sometimes referred to as common ownership. 45 The debate is not yet
settled, but it has raised concerns about the competitive effect of common ownership
because investors with small minority stakes may influence the behavior of an issuer.
Thus, the Commission proposes that the exemption in § 802.15 not apply if the acquiring
person is a competitor of the issuer or if the acquiring person holds more than 1% in a
competitor of the issuer on an aggregate basis. For instance, Fund Vehicle 1 will acquire
6% of Issuer D and Fund Vehicle 1 has two associates, Fund Vehicles 2 and 3. Fund
Vehicle 1 is the UPE but the Acquiring Person includes Fund Vehicles 1, 2 and 3 under
the proposed change to § 801.1(a)(1) discussed above. Fund Vehicles 1, 2 and 3 do not
control any competitors of Issuer D and Fund Vehicle 1 does not hold any minority
interest in a competitor of Issuer D, but Fund Vehicle 2 and Fund Vehicle 3 each holds a
1% minority interest in competitors of Issuer D. In this scenario, under the proposed rule,
Fund Vehicle 1 would not be able to rely on proposed § 802.15 because its associates
hold more than 1% in a competitor of Issuer D. This exception to the exemption would
ensure the Agencies receive filings that provide insights into the influence of holdings in

45
FTC Hearings on Competition and Consumer Protection in the 21st Century, Session 8, FTC.GOV. (Dec.
6, 2018), https://www.ftc.gov/news-events/events-calendar/ftc-hearing-8-competition-consumer-protection21st-century. See also Submission of the United States to OECD Hearing on Common Ownership by
institutional investors and its impact on competition, FTC.GOV. (Nov. 28, 2017),
https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2010-present-other-internationalcompetition-fora/common_ownership_united_states.pdf.

30

competitors. The Commission invites comment on this approach, including whether a
different level of ownership in a competitor of the issuer would be more appropriate in
determining that the proposed exemption should not apply.
The Rules do not currently define the term “competitor,” and to implement this
exception to the exemption, a definition must be added. The Commission proposes the
following definition for the purpose of implementing § 802.15: “§ 801.1(r) Competitor.
For purposes of these rules, the term competitor means any person that (1) reports
revenues in the same six-digit NAICS Industry Group as the issuer, or (2) competes in
any line of commerce with the issuer.” This proposed definition of “competitor” would
require two separate assessments to determine whether an acquiring person is a
competitor of the issuer or holds interests in a competitor of the issuer. The first prong of
the proposed definition would ask an acquiring person to look at the six-digit NAICS
codes of entities it controls and compare them with the NAICS codes the issuer reports.
NAICS codes (and their predecessor Standard Industrial Classification (“SIC”) codes)
have long been the basis for reporting revenues in the HSR Form, and they provide an
objective and easy to administer measure of whether an acquiring person and an issuer
compete. Moreover, because acquiring persons already compare their NAICS codes with
those of the issuer in order to respond to items in the Form, as discussed above, this
approach would be familiar to acquiring persons.
Filing parties can still be “competitors” even if they report in different NAICS
codes. Thus, the second prong of the proposed definition of “competitor” would rely on
filing parties to conduct a good faith assessment to determine whether any part of the
acquiring person competes with or holds interests in entities that compete with the issuer,

31

in any line of commerce. 46 The Commission expects that parties would do so consistent
with their ordinary course documentation and informational practices and be able to
defend reliance on proposed § 802.15 if challenged.
The Commission acknowledges that this proposed two-prong definition of
“competitor” is broad. The Agencies and the public will benefit from such a broad
definition because the Agencies, in fulfilling their obligations to enforce the antitrust
laws, have a strong interest in receiving HSR filings that reveal any indicia of
competition between the filing parties so the Agencies can fully evaluate the competitive
impact of the proposed acquisition. Nevertheless, the Commission invites comment on
other ways to define “competitor” that would still provide the Agencies with thorough
information on the competition that exists between filing parties.
Proposed § 802.15 also asks filing parties to ascertain the existence of officer or
director relationships between the acquiring person and the issuer. That is, the exemption
in proposed § 802.15 would be unavailable if someone from the acquiring person is an
officer or director of the issuer or a competitor of the issuer. To be an officer or director
of any issuer is to be intimately connected to that issuer. Officers make the issuer’s dayto-day business decisions, and directors determine the overall direction of the issuer. If
someone within the acquiring person has that kind of influence over the issuer or a
competitor of the issuer, the Agencies have a strong interest in receiving filings about that
proposed transaction to better understand its competitive impact. Thus, this exception to

46

As part of a typical antitrust compliance program, a company may already identify other companies that
have competing sales in order to avoid violating Section 8 of the Clayton Act. Subject to certain minimum
thresholds, Section 8 prohibits a person from serving as a director or an officer of two or more corporations
that are horizontal competitors.

32

the proposed exemption would ensure that acquisitions of potential competitive
significance do not become exempt.
Finally, the proposed § 802.15 exemption would not be available if the acquiring
person and the issuer are in a vertical relationship valued at $10 million or greater. There
can be important competitive implications in vertical relationships, and the Agencies
have a strong interest in reviewing transactions that create or expand vertical
relationships. This exception to the exemption would ensure the Agencies receive filings
where the buyer and issuer have a vertical relationship beyond the ordinary course. The
Commission intends to exclude the purchase of ordinary course services and goods (e.g.,
office supplies, financial services, etc.) and invites comment on whether $10 million is an
appropriate threshold to distinguish ordinary course vertical relationships from those with
competitive significance.
Proposed § 802.15 would allow the Agencies “to focus their resources more
effectively on those transactions that present the potential for competitive harm.” 47
Proposed § 802.15 would further the Agencies’ goal of eliminating filings for
acquisitions of 10% or less of an issuer where there is no existing competitive
relationship or significant vertical relationship between the acquiror and the issuer and
where the acquisition therefore is unlikely to violate the antitrust laws. At the same time,
proposed § 802.15 would balance the exemption of these kinds of acquisitions with the
Agencies’ interest in making sure that acquisitions of potential competitive significance
are not exempt. The Commission invites comment on whether there are other factors to

47

61 FR 13666 (Mar. 28, 1996).

33

consider in evaluating the proposed exceptions to the exemption, or if other categories
should be the subject of exceptions to the exemption.
Under proposed § 802.15, acquiring persons would have to evaluate their
connection to the issuer and the issuer’s competitors in several ways. Although this
approach is not without burden for acquiring persons, the Commission believes that
information concerning competitors, relationships with the issuer’s officers or directors,
and vertical relationships will either already be in acquiring persons’ possession or will
be relatively straightforward to gather. On the whole, proposed 802.15 should benefit
acquiring persons by exempting acquisitions of small amounts of voting securities
without an examination of intent as required by § 802.9. Section 802.9 would remain
unchanged and would still be available to exempt acquisitions of 10% or less of an issuer
where there is no intention to be involved in the basic business decisions of that issuer.
With the addition of proposed § 802.15, acquiring persons would have two potential
ways to exempt the acquisition of 10% or less of an issuer’s voting securities. 48
III.

Proposed Explanatory and Ministerial Changes to the Rules and the Form

and Instructions
To help illustrate the proposed changes to § 801.1 discussed above, the FTC
proposes adding some examples to the Rules. The proposed changes to § 801.1 would
also require explanatory and ministerial updates to the Form and Instructions.
A.

Revised Examples to §§ 801.1, 801.2

The Commission proposes revising the examples in §§ 801.1 and 801.2 to clarify
the proposed definition of person.

48

Institutional investors can also continue to rely on § 802.64.

34

Revised examples to § 801.1
1.

Edit example 4 to § 801.1(a)(1) to make “example” plural:

Example 4: See the examples to § 801.2(a).
2.

Add example 5 and 6 to § 801.1(a)(1):

Example 5. Fund 1, Fund 2, and Fund 3, each a UPE, are all associates under the
common investment management of Manager, as defined by § 801.1(d)(2). Fund 1’s
portfolio company A is making a reportable acquisition. The acquiring person includes
Manager, Fund 1, Fund 2, Fund 3, and A. Manager would file on behalf of the acquiring
person by placing its name in Item 1(a) of the Form. Manager indicates in Item 1(c) of
the filing that Fund 1 is making the acquisition. Fund 1 can also indicate in Item 1(c) of
the Form that it is filing on Manager’s behalf.
Example 6. Fund A will be selling its portfolio company P. Fund A’s investments are
managed by Investment Manager, and Fund A’s associates are Fund B, Fund C, and Fund
D. The acquired person includes Investment Manager, Fund A, Fund B, Fund C, and
Fund D. Investment Manager would file on behalf of Fund A, the selling UPE, by placing
its name in Item 1(a) of the Form. Fund A could also indicate in Item 1(c) of the Form
that it is filing on Investment Manager’s behalf.
3.

Add example 4 to § 801.1(a)(3):

Example 4: See the examples to § 801.1(a)(1).
4.
Edit text of § 801.1(d)(2) by removing “For purposes of Items 6 and 7 of the
Form,” capitalizing the subsequent “An,” and including “or acquired” as appropriate, so
that § 801.1(d)(2) reads as follows:
(d)(2) Associate. An associate of an acquiring or acquired person shall be an entity that is
not an affiliate of such person but:
(A) Has the right, directly or indirectly, to manage the operations or investment decisions
of an acquiring or acquired entity (a “managing entity”); or
(B) Has its operations or investment decisions, directly or indirectly, managed by the
acquiring or acquired person; or
(C) Directly or indirectly controls, is controlled by, or is under common control with a
managing entity; or
(D) Directly or indirectly manages, is managed by, or is under common operational or
investment decision management with a managing entity.

35

Revised examples to § 801.2:
1.

In § 801.2(a), number the current example as “Example 1” and add example 2.

Example 2: See the examples to § 801.1(a)(1).
2.

Add examples 3 and 4 to § 801.2(b)

Example 3: See the examples to § 801.1(a)(1).
Example 4: See the examples to § 801.12(a).
Revised examples to § 801.12(a)
1.

In § 801.12(a), number the current example as “example 1” and add example 2:

Example 2. Person “A” is composed of corporation A1 and subsidiary A2; person “B” is
composed of Fund 1 and Fund 2, which are associates managed by Investment Manager.
Both Fund 1 and Fund 2 hold shares of Issuer. A2 will acquire all of Issuer’s voting
securities held by Fund 1 and Fund 2. Under this paragraph, for purposes of calculating
the percentage of voting securities to be held, the “acquired person” is Issuer. For all
other purposes, the acquired person is “B.” (For all purposes, the “acquiring person” is
“A.”)
B.

Ministerial Changes to the Instructions and the Form

The Commission also proposes the following changes to the Instructions and
Form to clarify the definition of person as well as to streamline the Form where
appropriate in light of the proposed changes:
Definitions, p.I of Instructions:
The terms “person filing” or “filing person” mean an ultimate parent entity (“UPE”) and
its associates. Every person will have at least one UPE, and a person may be the same as
its UPE. Not every person will have associates, but when a person has associates, the
person will not be the same as its UPE(s). (See § 801.1(a)(1) and § 801.1(d)(2).)
Item 1(a), p.IV of Instructions:
Provide the name, headquarters address, and website (if one exists) of the person filing
notification. A person includes associates, but not every person will have associates. In
the case of a person that has associates, the person filing is the entity that manages the
associates (“managing entity”) as defined by § 801.1(d)(2). (See § 801.1(a)(1) and §
801.1(d)(2).)
Item 1(c), p.IV of the Instructions:
36

Put an X in the appropriate box to indicate whether the person in Item 1(a) is a
corporation, unincorporated entity, natural person, managing entity or other (specify). If
the person is a managing entity, indicate the UPE making the acquisition. Indicate if a
UPE is filing on behalf of the managing entity. (See § 801.1 and § 801.1(d)(2).)
Item 1(c) in the Form:
This item will include a new box for managing entity and space for listing the name of
the UPE making the acquisition.
Item 3(a), p.V of the Instructions:
Clarify that the item calls for information on the UPEs that are party to the transaction.
First paragraph: At the top of Item 3(a), list the name and mailing address of each
acquiring and acquired UPE, and acquiring and acquired entity, that are party to the
transaction whether or not required to file notification. It is not necessary to list every
subsidiary wholly-owned by an acquired entity.
Item 4(a), p.VI of the Instructions:
Add a requirement for acquiring persons to organize by UPE and by entity within each
UPE. Specify limits for acquired persons.
Acquiring persons: provide the names of all entities within the person filing notification,
including all UPEs, that file annual reports (Form 10-K or Form 20-F) with the United
States Securities and Exchange Commission, and provide the Central Index Key (“CIK”)
number for each entity. Responses must be organized by UPE and by entity within each
UPE.
Acquired persons: provide the names of all entities within the selling UPE, including the
UPE, that file annual reports (Form 10-K or Form 20-F) with the United States Securities
and Exchange Commission, and provide the Central Index Key (CIK) number for each
entity.
Item 4(b), p.VI of the Instructions:
Specify limits for acquired persons. Add a requirement to organize by UPE and by entity
within each UPE.
Acquiring persons: provide the most recent annual reports and/or annual audit reports (or,
if audited is unavailable, unaudited) of the person filing notification. The acquiring
person should also provide the most recent reports of the acquiring entity(s) and any
controlled entity whose dollar revenues contribute to an overlap reported in Item 7.
Responses must be organized by UPE and by entity within each UPE. If some of the
UPEs or entities do not prepare separate financial statements, explain how their financial
information is consolidated in the financial statements that are being submitted.

37

Acquired persons: provide the most recent annual reports and/or annual audit reports (or,
if audited is unavailable, unaudited) of the selling UPE. The acquired person should also
provide the most recent reports of the acquired entity(s).
Item 5, p.VII of the Instructions:
Add a requirement to organize by UPE and by entity within each UPE.
Second paragraph: Responses must be organized by UPE and entity within each UPE.
List all NAICS and NAPCS codes in ascending order.
Item 5(a), p.VII of the Instructions:
Clarify requirement for persons.
Last paragraph: Check the Overlap box for every 6-digit manufacturing and nonmanufacturing NAICS code and every 10-digit NAPCS code in which both persons
generate dollar revenues.
Item 6(a), p.VIII of the Instructions:
Add a requirement to organize by UPE and by entity within each UPE.
Subsidiaries of filing person. List the name, city, and state/county of all U.S. entities,
and all foreign entities that have sales in or into the U.S., that are included within the
person filing notification. Responses must be organized by UPE and by entity within each
UPE. Entities with total assets of less than $10 million may be omitted. Alternatively, the
person filing notification may report all entities within it.
Item 6(b), p.VIII of the Instructions:
Add a requirement to organize by UPE and by entity within each UPE.
Minority shareholders. For the acquired entity(s) and for the acquiring entity(s) and its
UPE(s) or, in the case of natural persons, the top-level corporate or unincorporated
entity(s) within the UPE(s), list the name and headquarters mailing address of each
shareholder that holds 5% or more but less than 50% of the outstanding voting securities
or non-corporate interests of the entity, and the percentage of voting securities or noncorporate interests held by that person. Responses must be organized by UPE and entity
within each UPE. (See § 801.1(c)).
Item 6(c), p.VIII-IX of the Instructions:
Item 6(c) is currently segmented into two different sections: Item 6(c)(i) deals with the
person filing and Item 6(c)(ii) deals with that person’s associates. Since the proposed
definition of person would include associates, these two items within 6(c) would be
collapsed and the Item renumbered to Item 6(c) with no subparts. The information
required by this item would still be limited to entities within the acquiring person that
report in the same NAICS code as the target. New 6(c) would read as follows:
Item 6(c)
38

Minority holdings of filing person. If the person filing notification holds 5% or more
but less than 50% of the voting securities of any issuer or non-corporate interests of any
unincorporated entity, list the issuer and percentage of voting securities held, or in the
case of an unincorporated entity, list the unincorporated entity and the percentage of noncorporate interests held.
The acquiring person should limit its response, based on its knowledge or belief, to
entities that derived dollar revenues in the most recent year from operations in industries
within any 6-digit NAICS industry code in which the acquired entity(s) or assets also
derived dollar revenues in the most recent year. The acquiring person may rely on its
regularly prepared financials that list its investments, provided the financials are no more
than three months old. Responses must be organized by UPE and by entity within each
UPE.
The acquired person should limit its response, based on its knowledge or belief, to
entities that derive dollar revenues in the same 6-digit NAICS industry code as the
acquiring person.
If NAICS codes are unavailable, holdings in entities that have operations in the same
industry, based on the knowledge or belief of the acquiring person, should be listed. In
responding to Item 6(c), it is permissible for the acquiring person to list all entities in
which it holds 5% or more but less than 50% of the voting securities of any issuer or noncorporate interests of any unincorporated entity. Holdings in those entities that have total
assets of less than $10 million may be omitted.
Item 7, p.IX-X of the Instructions:
Item 7(a) currently requires information from both the acquiring person and its
associates. Since the proposed definition of person would include associates, Item 7(a)
would be revised to eliminate the separate reference to associates.
Item 7(b)
The information required by Item 7(b) would be incorporated into Items 5 and 6(a), so
this item would be eliminated.
Items 7(c) and 7(d)
Current Item 7(c) deals with the person filing and Item 7(d) deals with that person’s
associates, so these two items would be collapsed and renumbered to new 7(b).
New Item 7 would read as follows:
If, to the knowledge or belief of the person filing notification, the acquiring person
derived any amount of dollar revenues (even if omitted from Item 5) in the most recent
year from operations:
1) in industries within any 6-digit NAICS industry code in which any acquired entity
that is a party to the acquisition also derived any amount of dollar revenues in the
39

most recent year; or
2) in which a joint venture corporation or unincorporated entity will derive dollar
revenues;
then for each such 6-digit NAICS industry code follow the instructions below for this
section.
Note that if the acquired entity is a joint venture, the only overlaps that should be
reported are those between the assets to be held by the joint venture and any assets of the
acquiring person not contributed to the joint venture.
Responses must be organized by UPE and by entity within each UPE.
Item 7(a)
Industry Code Overlap Information
Provide the 6-digit NAICS industry code and description for the industry.
Item 7(b)
Geographic Market Information
Use the 2-digit postal codes for states and territories and provide the total number of
states and territories at the end of the response.
Note that except in the case of those NAICS industries in the Sectors and Subsectors
mentioned in Item 7(b)(iv)(b), the person filing notification may respond with the word
“national” if business is conducted in all 50 states.
Item 7(b)(i)
NAICS Sectors 31-33
For each 6-digit NAICS industry code within NAICS Sectors 31-33 (manufacturing
industries) listed in Item 7(a), list the relevant geographic information in which, to the
knowledge or belief of the person filing the notification, the products in that 6-digit
NAICS industry code produced by the person filing notification are sold without a
significant change in their form (whether they are sold by the person filing notification or
by others to whom such products have been sold or resold). Except for industries covered
by Item 7(b)(iv)(b), the relevant geographic information is all states or, if desired,
portions thereof.
Item 7(b)(ii)
NAICS Sector 42
For each 6-digit NAICS industry code within NAICS Sector 42 (wholesale trade) listed
in Item 7(a), list the states or, if desired, portions thereof in which the customers of the
person filing notification are located.
Item 7(b)(iii)
NAICS Industry Group 5241

40

For each 6-digit NAICS industry code within NAICS Industry Group 5241 (insurance
carriers) listed in Item 7(a), list the state(s) in which the person filing notification is
licensed to write insurance.
Item 7(b)(iv)(a)
Other NAICS Sectors
For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, list the states or, if desired, portions thereof in which the person filing
notification conducts such operations.
11
agriculture, forestry, fishing and hunting
21
mining
22
utilities
23
construction
48-49 transportation and warehousing
511
publishing industries
515
broadcasting
517
telecommunications
71
arts, entertainment and recreation
Item 7(b)(iv)(b)
For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, provide the address, arranged by state, county and city or town, of
each establishment from which dollar revenues were derived in the most recent year by
the person filing notification.
2123 nonmetallic mineral mining and quarrying
32512 industrial gases
32732 concrete
32733 concrete products
44-45 retail trade, except 442 (furniture and home furnishings stores), and 443
(electronics and appliance stores)
512
motion picture and sound recording industries
521
monetary authorities - central bank
522
credit intermediation and related activities
532
rental and leasing services
62
health care and social assistance
72
accommodations and food services, except 7212 (recreational vehicle
parks and recreational camps), and 7213 (rooming and boarding houses)
811
repair and maintenance, except 8114 (personal and household goods repair
and maintenance)
812
personal and laundry services
Item 7(b)(iv)(c)

41

For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, list the states or, if desired, portions thereof in which the person filing
notification conducts such operations.
442
443
516
518
519
523
5242
525
53
54
55
56
61
7212
7213
813
8114

furniture and home furnishings stores
electronics and appliance stores
internet publishing & broadcasting
internet service providers
other information services
securities, commodity contracts and other financial investments and
related activities
insurance agencies and brokerages, and other insurance related activities
funds, trusts and other financial vehicles
real estate and rental and leasing
professional, scientific and technical services
management of companies and enterprises
administrative and support and waste management and remediation
services
educational services
recreational vehicle parks and recreational camps
rooming and boarding houses
religious, grantmaking, civic, professional, and similar organizations
personal and household goods repair and maintenance

Item 8, p.XI of the Instructions:
Add a requirement to organize by UPE and by entity within each UPE.
For each such acquisition, supply:
1) the 6-digit NAICS industry code (by number and description) identified above in
which the acquired entity derived dollar revenues;
2) the name of the entity from which the assets, voting securities or non-corporate
interests were acquired;
3) the headquarters address of that entity prior to the acquisition;
4) whether assets, voting securities or non-corporate interests were acquired; and
5) the consummation date of the acquisition.
Responses must be organized by UPE and by entity within each UPE.
IV.

Communications by Outside Parties to Commissioners and Their Advisors

42

Written communications and summaries or transcripts of oral communications
respecting the merits of this proceeding, from any outside party to any Commissioner or
Commissioner's advisor, will be placed on the public record. See 16 CFR 1.26(b)(5).
V.

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
proposed amendments on small entities, 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, if ever, affect small entities. 49 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 Gross National Product
resulting in a current threshold of $94 million. Further, none of the proposed amendments
expands the coverage of the premerger notification rules in a way that would affect small
entities. Accordingly, the Commission certifies that these proposed amendments 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.
VI.

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

49

See 13 CFR part 121 (regulations defining small business size).

43

reporting, recordkeeping, or disclosure requirements contained in regulations. The
existing information collection requirements in the HSR Rules and Form have been
reviewed and approved by OMB under OMB Control No. 3084-0005. The current
clearance expires on January 31, 2023. Because the rule amendments proposed in this
NPRM would change existing reporting requirements, the Commission is submitting a
Supporting Statement for Information Collection Provisions (“Supporting Statement”) to
OMB.
Amending § 801.1(a)(1) – Acquiring Persons
The Commission proposes to amend the § 801.1(a)(1) definition of “person” to
require certain acquiring persons to disclose additional information about their associates
when making an HSR filing. Thus, Items 4 through 8 (excluding Items 6(c) and 7) 50 on
the Notification and Report Form (HSR Form) would be revised to seek information
about associates of certain acquiring persons, including the aggregation of acquisitions in
the same issuer across its associates. The Commission acknowledges that this proposed
change would result in an increased burden for certain acquiring persons. Non-corporate
entity UPEs within families of funds and MLPs would be required to provide significant
additional information on behalf of their associates under the proposed change. These
entities are, however, already accustomed to looking into the holdings of those associates
for filings where they are acquiring persons as a result of the treatment of associates
under the current Rules. Given that these entities already conduct such inquiries, the
Commission believes requiring additional information about entities that have already
been identified should result in limited additional burden for filers. Based on filing data

50

There would be no changes to what Items 6(c) and 7 require, because those items already require
information from associates.

44

from the past five fiscal years, the Commission estimates that 17.28% of entities would
be required to provide additional information on behalf of associates. From this, we
anticipate 846 filings would be affected per fiscal year (17.28% x 4894 filings per year,
as estimated in the FTC’s most recent PRA clearance for the HSR Rules). The
Commission also estimates that each affected filer will need about 10-15 additional hours
per filing to comply. Thus, the aggregation is expected to lead to 10,575 additional
annual hours of burden (846 filings x 12.5 hours per filing). The Commission seeks
comments to help inform such burden estimates, to the extent applicable.
The proposed change to § 801.1(a)(1) would also result in a reduced burden for
certain acquiring persons by eliminating the potential need for families of funds and
MLPs to make multiple filings with multiple filing fees. Based on filing data from the
past five fiscal years, the Commission estimates that 39 filings would be affected per
fiscal year. Since the FTC’s current clearance with OMB estimates an average reporting
burden per responding filer of 37 hours per filing, the proposed change to § 801.1(a)(1)
would be a reduction of 1,443 hours of annual burden (39 filings x 37 hours per filing).
The Commission seeks comments to help inform such burden estimates, to the extent
applicable.
Acquired Persons
Additionally, the Commission’s proposal to revise the HSR Instructions to limit
the financial information required in Items 4(a) and 4(b) should reduce burden for certain
acquired persons. The HSR Form already limits what acquired persons must report in
Items 5 through 7 to information on those assets, voting securities and non-corporate
interests being acquired in the transaction at issue. The Commission’s proposal to amend

45

the HSR Instructions would create a similar limit for acquired persons with respect to
Items 4(a) and 4(b) and should result in a reduction in the burden for families of funds
and MLPs filing as acquired persons who will now face a more limited reporting burden
after the amendments. Based on filing data from the past five fiscal years, the
Commission estimates that 357 filings would be affected per fiscal year. The
Commission also estimates that the burden on each affected filer will be reduced by 5
hours per filing. Thus, the proposed limit for acquired party reporting is expected to lead
to a reduction in burden of 1,785 annual hours (357 filings x 5 hours per filing). The
Commission seeks comments to help inform such burden estimates, to the extent
applicable.
Amending § 802.15 – Acquisition of 10% or less
Additionally the Commission proposes a new exemption, § 802.15, which would
exempt the acquisition of 10% or less of an issuer’s voting securities in certain
circumstances. Proposed § 802.15 exempts the acquisition of 10% or less of an issuer’s
voting securities unless the acquiring person already has a competitively significant
relationship with the issuer, such as operating competing lines of business or having an
existing vertical relationship, or where the investor (or its agent) is an officer or director
of the issuer or a competitor. This proposed exemption would allow the acquisition of
small amounts of voting securities without an examination of intent as required by
§ 802.9. As a result, the Commission anticipates that this exemption will reduce
somewhat the number of transactions subject to review under the Rule and the number of
entities that must engage in reporting under the Rule. Over the period from FY 2001 to
FY 2017, the Commission received an average of 106 filings per fiscal year for

46

acquisitions of 10% or less. 51 Some of these filings would fall within the exemption in
proposed § 802.15, leading to a reduction in burden for entities that would no longer need
to report under the Rule. However, the Commission does not currently possess
information as to how many entities would qualify for the proposed § 802.15 exemption.
The Commission therefore requests comment on the percentage of entities that would
qualify for the proposed exemption.
Explanatory and Ministerial Changes
Finally, the Commission proposes explanatory and ministerial changes to the
rules, as well as necessary amendments to the HSR Form and Instructions to effect the
proposed changes. These changes will result in no change to the information collection
burden under the Rule.
Request for Comments
As noted above, the Commission invites comments on anticipated burdens for the
proposed amendments and comments that will enable it to: (1) evaluate whether the
proposed collections of information are necessary for the proper performance of the
functions of the Commission, including whether the information will have practical
utility; (2) evaluate the accuracy of the Commission’s estimate of the burden of the
proposed collections of information, including the validity of the methodology and
assumptions used; (3) enhance the quality, utility, and clarity of the information to be
collected; and (4) minimize the burden of the collections of information on those who

51

As set out in footnote 1, the Agencies received a total of 1,804 HSR filings from FY 2001 to FY 2017 for
acquisitions of 10% of less of outstanding stock. During that same period, the Agencies did not challenge
any acquisitions involving a stake of 10% or less.

47

must comply, including through the use of appropriate automated, electronic, mechanical,
or other technological techniques or other forms of information technology.
Comments on the proposed reporting requirements subject to Paperwork
Reduction Act review by OMB should additionally be submitted to
www.reginfo.gov/public/do/PRAMain. Find this particular information collection by
selecting “Currently under 30-day Review - Open for Public Comments” or by using the
search function. The reginfo.gov web link is a United States Government website
produced by OMB and the General Services Administration (GSA). Under PRA
requirements, OMB’s Office of Information and Regulatory Affairs (OIRA) reviews
Federal information collections.
List of Subjects in 16 CFR Parts 801, 802, and 803
Antitrust
For the reasons stated in the preamble, the Federal Trade Commission proposes to
amend 16 CFR parts 801, 802, and 803 as set forth below:
PART 801—COVERAGE RULES
1. The authority citation for part 801 continues to read as follows:
Authority: 15 U.S.C. 18a(d).
2. Amend § 801.1 by revising paragraph (a)(1) , revising the examples to paragraph
(a)(1), revising the examples to paragraph (a)(3), revising paragraph (d)(2), and adding
paragraph (r), to read as follows:
§ 801.1 Definitions.
***
(a)(1) Person. Except as provided in paragraphs (a) and (b) of § 801.12, the term person
means (a) an ultimate parent entity and all entities which it controls directly or indirectly;
and (b) all associates of the ultimate parent entity.

48

Examples:
***
4. See the examples to § 801.2(a).
5. Fund 1, Fund 2, and Fund 3, each a UPE, are all associates under the common
investment management of Manager, as defined by § 801.1(d)(2). Fund 1’s portfolio
company A is making a reportable acquisition. The acquiring person includes Manager,
Fund 1, Fund 2, Fund 3, and A. Manager would file on behalf of the acquiring person by
placing its name in Item 1(a) of the Form. Manager indicates in Item 1(c) of the filing
that Fund 1 is making the acquisition. Fund 1 can also indicate in Item 1(c) of the Form
that it is filing on Manager’s behalf.
6. Fund A will be selling its portfolio company P. Fund A’s investments are managed by
Investment Manager, and Fund A’s associates are Fund B, Fund C, and Fund D. The
acquired person includes Investment Manager, Fund A, Fund B, Fund C, and Fund D.
Investment Manager would file on behalf of Fund A, the selling UPE, by placing its
name in Item 1(a) of the Form. Fund A could also indicate in Item 1(c) of the Form that it
is filing on Investment Manager’s behalf.
*****
(a) * * *
(3) * * *
Examples:
***
4. See the examples to § 801.1(a)(1).
*****
(d) * * *
(2) Associate. An associate of an acquiring or acquired person shall be an entity that is
not an affiliate of such person but
(A) Has the right, directly or indirectly, to manage the operations or investment decisions
of an acquiring or acquired entity (a “managing entity”); or
(B) Has its operations or investment decisions, directly or indirectly, managed by the
acquiring or acquired person; or

49

(C) Directly or indirectly controls, is controlled by, or is under common control with a
managing entity; or
(D) Directly or indirectly manages, is managed by, or is under common operational or
investment decision management with a managing entity.
*****
(r) Competitor. For purposes of these rules, the term competitor means any person that
(1) reports revenues in the same six-digit NAICS Industry Group as the issuer, or (2)
competes in any line of commerce with the issuer.
3. Amend § 801.2 by revising the examples to paragraph (a) and revising the examples to
paragraph (b) to read as follows:
§ 801.2 Acquiring and acquired persons.
(a) * * *
Examples:
1. Assume that corporations A and B, which are each ultimate parent entitles of their
respective “persons,” created a joint venture, corporation V, and that each holds half of
V's shares. Therefore, A and B each control V (see § 801.1(b)), and V is included within
two persons, “A” and “B.” Under this section, if V is to acquire corporation X, both “A”
and “B” are acquiring persons.
2. See the examples to § 801.1(a)(1).
(b) * * *
Examples:
***
3. See the examples to § 801.1(a)(1).
4. See the examples to § 801.12(a).
4. Amend § 801.12(a) by revising the examples to paragraph (a) to read as follows:
§ 801.12 Calculating percentage of voting securities.
(a) * * *

50

Examples: 1. Person “A” is composed of corporation A1 and subsidiary A2; person “B”
is composed of corporation B1 and subsidiary B2. Assume that A2 proposes to sell assets
to B1 in exchange for common stock of B2. Under this paragraph, for purposes of
calculating the percentage of voting securities to be held, the “acquired person” is B2. For
all other purposes, the acquired person is “B.” (For all purposes, the “acquiring persons”
are “A” and “B.”)
2. Person “A” is composed of corporation A1 and subsidiary A2; person “B” is composed
of Fund 1 and Fund 2, which are associates managed by Investment Manager. Both Fund
1 and Fund 2 hold shares of Issuer. A2 will acquire all of Issuer’s voting securities held
by Fund 1 and Fund 2. Under this paragraph, for purposes of calculating the percentage
of voting securities to be held, the “acquired person” is Issuer. For all other purposes, the
acquired person is “B.” (For all purposes, the “acquiring person” is “A.”)
*****
PART 802—EXEMPTION RULES
5. The authority citation for part 802 continues to read as follows:
Authority: 15 U.S.C. 18a(d).
6. Add § 802.15 to read as follows:
§ 802.15 De minimis acquisitions of voting securities.
An acquisition of voting securities shall be exempt from the requirements of the act if as a
result of the acquisition:
(a) the acquiring person does not hold in excess of 10% of the outstanding voting
securities of the issuer; and
(b)(i) the acquiring person is not a competitor of the issuer (or any entity within the
issuer);
(ii) the acquiring person does not hold voting securities in excess of 1% of the
outstanding voting securities (or, in the case of a non-corporate entity, in excess of 1%
of the non-corporate interests) of any entity that is a competitor of the issuer (or any
entity within the issuer);
(iii) no individual who is employed by, a principal of, an agent of, or otherwise acting on
behalf of the acquiring person, is a director or officer of the issuer (or of an entity
within the issuer);
(iv) no individual who is employed by, a principal of, an agent of, or otherwise acting on
behalf of the acquiring person, is a director or officer of a competitor of the issuer (or
of an entity within the issuer); and
51

(v) there is no vendor-vendee relationship between the acquiring person and the issuer (or
any entity within the issuer), where the value of sales between the acquiring person
and the issuer in the most recently completed fiscal year is greater than $10 million in
the aggregate.
Examples: 1. Investment Manager manages the investments of Fund 1 and Fund 2, which
are associates. Investment Manager, Fund 1 and Fund 2 are all part of the Acquiring
Person. Fund 1 is acquiring 5% of Issuer. Fund 1 has a .4% interest in a competitor of
Issuer and Fund 2 has a .5% interest in the same competitor of Issuer. The acquisition of
the 5% interest in Issuer would be exempt under § 802.15.
2. Investment Manager manages the investments of Fund 1 and Fund 2, which are
associates. Investment Manager, Fund 1 and Fund 2 are all part of the Acquiring
Person. Fund 1 is acquiring 5% of Issuer. Fund 1 has a .4% interest in a competitor of
Issuer and Fund 2 has a .3% interest in a different competitor of Issuer. The acquisition of
the 5% interest in Issuer would be exempt under § 802.15.
3. Investment Manager manages the investments of Fund 1 and Fund 2, which are
associates. Investment Manager, Fund 1 and Fund 2 are all part of the Acquiring
Person. Fund 1 is acquiring 5% of Issuer. Fund 1 controls an operating company that is a
competitor of Issuer. The acquisition of the 5% interest in Issuer would not be exempt
under § 802.15.
4. Investment Manager manages the investments of Fund 1, Fund 2, Fund 3, and Fund 4,
which are associates. Investment Manager, Fund 1, Fund 2, Fund 3 and Fund 4 are all
part of the Acquiring Person. Fund 1 is acquiring 5% of Issuer. Fund 2, Fund 3 and Fund
4 each have a .4% interest in a competitor of Issuer. The acquisition of the 5% interest in
Issuer would not be exempt under § 802.15.
5. Investment Manager manages the investments of Fund 1 and Fund 2, which are
associates. Investment Manager, Fund 1 and Fund 2 are all part of the Acquiring
Person. Fund 1 is acquiring 5% of Issuer. One of Fund 2’s officers (or the equivalent
thereof) also serves as an officer of Issuer. The acquisition of the 5% interest in Issuer
would not be exempt under § 802.15.
6. Investment Manager manages the investments of Fund 1, Fund 2, Fund 3, and Fund 4,
which are associates. Investment Manager, Fund 1, Fund 2, Fund 3 and Fund 4 are all
part of the Acquiring Person. Fund 1 is acquiring 5% of Issuer. One of Fund 4’s officers
(or the equivalent thereof) also serves as an officer of a competitor of Issuer’s
subsidiary. The acquisition of the 5% interest in Issuer would not be exempt under §
802.15.
7. Investment Manager manages the investments of Fund 1 and Fund 2, which are
associates. Investment Manager, Fund 1 and Fund 2 are all part of the Acquiring
Person. Fund 1 is acquiring 5% of Issuer. Fund 1 controls an operating company that has
52

a vendor-vendee relationships with Issuer valued in excess of $10 million. The
acquisition of the 5% interest in Issuer would not be exempt under § 802.15.
PART 803—TRANSMITTAL RULES
7. The authority citation for part 803 continues to read as follows:
Authority: 15 U.S.C. 18a(d).
8. Revise Appendix A and Appendix B to Part 803 as follows:
Definitions, p.I of Instructions:
The terms “person filing” or “filing person” mean an ultimate parent entity (“UPE”) and
its associates. Every person will have at least one UPE, and a person may be the same as
its UPE. Not every person will have associates, but when a person has associates, the
person will not be the same as its UPE(s). (See § 801.1(a)(1) and § 801.1(d)(2).)
Item 1(a), p.IV of Instructions:
Provide the name, headquarters address, and website (if one exists) of the person filing
notification. A person includes associates, but not every person will have associates. In
the case of a person that has associates, the person filing is the entity that manages the
associates (“managing entity”) as defined by § 801.1(d)(2). (See § 801.1(a)(1) and §
801.1(d)(2).)
Item 1(c), p.IV of the Instructions:
Put an X in the appropriate box to indicate whether the person in Item 1(a) is a
corporation, unincorporated entity, natural person, managing entity or other (specify). If
the person is a managing entity, indicate the UPE making the acquisition. Indicate if a
UPE is filing on behalf of the managing entity. (See § 801.1 and § 801.1(d)(2).)
Item 3(a), p.V of the Instructions:
First paragraph: At the top of Item 3(a), list the name and mailing address of each
acquiring and acquired UPE, and acquiring and acquired entity, that are party to the
transaction whether or not required to file notification. It is not necessary to list every
subsidiary wholly-owned by an acquired entity.
Item 4(a), p.VI of the Instructions:
Acquiring persons: provide the names of all entities within the person filing notification,
including all UPEs, that file annual reports (Form 10-K or Form 20-F) with the United
States Securities and Exchange Commission, and provide the Central Index Key (“CIK”)
number for each entity. Responses must be organized by UPE and by entity within each
UPE.
Acquired persons: provide the names of all entities within the selling UPE, including the
UPE, that file annual reports (Form 10-K or Form 20-F) with the United States Securities
53

and Exchange Commission, and provide the Central Index Key (CIK) number for each
entity.
Item 4(b), p.VI of the Instructions:
Acquiring persons: provide the most recent annual reports and/or annual audit reports (or,
if audited is unavailable, unaudited) of the person filing notification. The acquiring
person should also provide the most recent reports of the acquiring entity(s) and any
controlled entity whose dollar revenues contribute to an overlap reported in Item 7.
Responses must be organized by UPE and by entity within each UPE. If some of the
UPEs or entities do not prepare separate financial statements, explain how their financial
information is consolidated in the financial statements that are being submitted.
Acquired persons: provide the most recent annual reports and/or annual audit reports (or,
if audited is unavailable, unaudited) of the selling UPE. The acquired person should also
provide the most recent reports of the acquired entity(s).
Item 5, p.VII of the Instructions:
Second paragraph: Responses must be organized by UPE and entity within each UPE.
List all NAICS and NAPCS codes in ascending order.
Item 5(a), p.VII of the Instructions:
Last paragraph: Check the Overlap box for every 6-digit manufacturing and nonmanufacturing NAICS code and every 10-digit NAPCS code in which both persons
generate dollar revenues.
Item 6(a), p.VIII of the Instructions:
Subsidiaries of filing person. List the name, city, and state/county of all U.S. entities,
and all foreign entities that have sales in or into the U.S., that are included within the
person filing notification. Responses must be organized by UPE and by entity within each
UPE. Entities with total assets of less than $10 million may be omitted. Alternatively, the
person filing notification may report all entities within it.
Item 6(b), p.VIII of the Instructions:
Minority shareholders. For the acquired entity(s) and for the acquiring entity(s) and its
UPE(s) or, in the case of natural persons, the top-level corporate or unincorporated
entity(s) within the UPE(s), list the name and headquarters mailing address of each
shareholder that holds 5% or more but less than 50% of the outstanding voting securities
or non-corporate interests of the entity, and the percentage of voting securities or noncorporate interests held by that person. Responses must be organized by UPE and entity
within each UPE. (See § 801.1(c)).
Item 6(c)
Minority holdings of filing person. If the person filing notification holds 5% or more
but less than 50% of the voting securities of any issuer or non-corporate interests of any
unincorporated entity, list the issuer and percentage of voting securities held, or in the
54

case of an unincorporated entity, list the unincorporated entity and the percentage of noncorporate interests held.
The acquiring person should limit its response, based on its knowledge or belief, to
entities that derived dollar revenues in the most recent year from operations in industries
within any 6-digit NAICS industry code in which the acquired entity(s) or assets also
derived dollar revenues in the most recent year. The acquiring person may rely on its
regularly prepared financials that list its investments, provided the financials are no more
than three months old. Responses must be organized by UPE and by entity within each
UPE.
The acquired person should limit its response, based on its knowledge or belief, to
entities that derive dollar revenues in the same 6-digit NAICS industry code as the
acquiring person.
If NAICS codes are unavailable, holdings in entities that have operations in the same
industry, based on the knowledge or belief of the acquiring person, should be listed. In
responding to Item 6(c), it is permissible for the acquiring person to list all entities in
which it holds 5% or more but less than 50% of the voting securities of any issuer or noncorporate interests of any unincorporated entity. Holdings in those entities that have total
assets of less than $10 million may be omitted.
Item 7, p.IX-X of the Instructions:
If, to the knowledge or belief of the person filing notification, the acquiring person
derived any amount of dollar revenues (even if omitted from Item 5) in the most recent
year from operations:
1) in industries within any 6-digit NAICS industry code in which any acquired entity
that is a party to the acquisition also derived any amount of dollar revenues in the
most recent year; or
2) in which a joint venture corporation or unincorporated entity will derive dollar
revenues;
then for each such 6-digit NAICS industry code follow the instructions below for this
section.
Note that if the acquired entity is a joint venture, the only overlaps that should be
reported are those between the assets to be held by the joint venture and any assets of the
acquiring person not contributed to the joint venture.
Responses must be organized by UPE and by entity within each UPE.
Item 7(a)
Industry Code Overlap Information
Provide the 6-digit NAICS industry code and description for the industry.

55

Item 7(b)
Geographic Market Information
Use the 2-digit postal codes for states and territories and provide the total number of
states and territories at the end of the response.
Note that except in the case of those NAICS industries in the Sectors and Subsectors
mentioned in Item 7(b)(iv)(b), the person filing notification may respond with the word
“national” if business is conducted in all 50 states.
Item 7(b)(i)
NAICS Sectors 31-33
For each 6-digit NAICS industry code within NAICS Sectors 31-33 (manufacturing
industries) listed in Item 7(a), list the relevant geographic information in which, to the
knowledge or belief of the person filing the notification, the products in that 6-digit
NAICS industry code produced by the person filing notification are sold without a
significant change in their form (whether they are sold by the person filing notification or
by others to whom such products have been sold or resold). Except for industries covered
by Item 7(b)(iv)(b), the relevant geographic information is all states or, if desired,
portions thereof.
Item 7(b)(ii)
NAICS Sector 42
For each 6-digit NAICS industry code within NAICS Sector 42 (wholesale trade) listed
in Item 7(a), list the states or, if desired, portions thereof in which the customers of the
person filing notification are located.
Item 7(b)(iii)
NAICS Industry Group 5241
For each 6-digit NAICS industry code within NAICS Industry Group 5241 (insurance
carriers) listed in Item 7(a), list the state(s) in which the person filing notification is
licensed to write insurance.
Item 7(b)(iv)(a)
Other NAICS Sectors
For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, list the states or, if desired, portions thereof in which the person filing
notification conducts such operations.
11
agriculture, forestry, fishing and hunting
21
mining
22
utilities
23
construction
48-49 transportation and warehousing
511
publishing industries
515
broadcasting
517
telecommunications
56

71

arts, entertainment and recreation

Item 7(b)(iv)(b)
For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, provide the address, arranged by state, county and city or town, of
each establishment from which dollar revenues were derived in the most recent year by
the person filing notification.
2123 nonmetallic mineral mining and quarrying
32512 industrial gases
32732 concrete
32733 concrete products
44-45 retail trade, except 442 (furniture and home furnishings stores), and 443
(electronics and appliance stores)
512
motion picture and sound recording industries
521
monetary authorities - central bank
522
credit intermediation and related activities
532
rental and leasing services
62
health care and social assistance
72
accommodations and food services, except 7212 (recreational vehicle
parks and recreational camps), and 7213 (rooming and boarding houses)
811
repair and maintenance, except 8114 (personal and household goods repair
and maintenance)
812
personal and laundry services
Item 7(b)(iv)(c)
For each 6-digit NAICS industry code listed in item 7(a) within the NAICS Sectors or
Subsectors below, list the states or, if desired, portions thereof in which the person filing
notification conducts such operations.
442
443
516
518
519
523

furniture and home furnishings stores
electronics and appliance stores
internet publishing & broadcasting
internet service providers
other information services
securities, commodity contracts and other financial investments and
related activities
5242 insurance agencies and brokerages, and other insurance related activities
525
funds, trusts and other financial vehicles
53
real estate and rental and leasing
54
professional, scientific and technical services
55
management of companies and enterprises
56
administrative and support and waste management and remediation
services
61
educational services
7212 recreational vehicle parks and recreational camps
57

7213
813
8114

rooming and boarding houses
religious, grantmaking, civic, professional, and similar organizations
personal and household goods repair and maintenance

Item 8, p.XI of the Instructions:
For each such acquisition, supply:
1) the 6-digit NAICS industry code (by number and description) identified above in
which the acquired entity derived dollar revenues;
2) the name of the entity from which the assets, voting securities or non-corporate
interests were acquired;
3) the headquarters address of that entity prior to the acquisition;
4) whether assets, voting securit

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Aftc%3A4e0d7465a9a6a90c. Public record. Not legal advice.