FOURTEENTH ANNUAL REPORT (1991)

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FOURTEENTH ANNUAL REPORT

TO CONGRESS

PURSUANT TO SECTION 201

OF THE

_ HART-SCOTT-RODINO ANTITRUST

IMPROVEMENTS ACT OF 1976

(Fiscal Year 1991)

I D ION

Section 201 of the Hart-Scott-Rodino Antitrust Improvements

Act of 1976, Pub. L. 94-435, amended the Clayton Act by adding a

new Section 7A, 15 U.S.C. Section 18a ("the Act"). Subsection

(j) of Section 7A provides as follows:

Beginning not later than January 1, 1978,

the Federal Trade Commission, with the

concurrence of the Assistant Attorney

General, shall annually report to the

Congress on the operation of this

section. Such report shall include an

assessment of the effects of this

section, of the effects, purpose, and the

need for any rules promulgated pursuant

thereto, and any recommendations for

revisions of this section.

This is the fourteenth annual report to Congress pursuant to

this provision. It covers fiscal year 1991.

In general, Section 7A requires that certain proposed

acquisitions of stock or assets must be reported to the Federal

Trade Commission and the Department of Justice prior to

consummation. The parties must then wait a specified period,

usually thirty days (fifteen days in the case of a cash tender

offer and ten days in the case of a bankruptcy sale), before they

may complete the transaction. Whether a particular acquisition

is subject to these requirements depends upon the value of the

acquisition and the size of the parties, as measured by their

sales and assets. Small acquisitions, acquisitions involving

small parties and other classes of acquisitions that are less

likely to raise antitrust concerns are excluded from the Act's

coverage.

The primary purpose of the statutory scheme, as the

legislative history makes clear, is to provide the antitrust

enforcement agencies with the opportunity to review mergers and

acquisitions before they occur. The premerger notification

program, with its filing and waiting period requirements,

provides the agencies with both the time and the information to

conduct this antitrust review. Much of the information needed

for a preliminary antitrust evaluation is included in the

notification filed with the agencies and thus is immediately

available for review during the waiting period.

If either agency determines during the waiting period that

further inquiry is necessary, it is authorized by Section 7A(e)

to request additional information or documentary materials from

either or both of the parties to a reported transaction. Such a

request extends the waiting period for a specified period,

usually twenty days (ten days in the case of a cash tender

offer), after the parties have complied with the request (or in

the case of a tender offer, after the acquiring person complies).

This additional time provides the agencies with the opportunity

to review the information and to take appropriate action before

the transaction is consummated. If either agency believes that a

proposed transaction may violate the antitrust laws, the agency

may seek an injunction in federal district court to prohibit

consummation of the transaction.

Final rules implementing the premerger notification program

were promulgated by the Commission, with the concurrence of the

Assistant Attorney General, on July 31, 1978. At that time, a

comprehensive Statement of Basis and Purpose was also published

containing a section-by-section analysis of the rules and an

item-by-item analysis of the Premerger Notification and Report

Form. The program became effective on September 5, 1978. In

1983, the Commission, with the concurrence of the Assistant

Attorney General, made several changes in the premerger

notification rules. Those amendments became effective on

August 29, 1983.7 Additional amendments were published in the

Federal Register on March 6, 1987,° and May 29, 1987.‘

The appendices to this report provide a statistical summary

of the operation of the premerger notification program. Appendix

A shows for each fiscal year in which the program has been in

operation the number of transactions reported,” the number of

, 43 Fed. Reg. 33,450 (1978). The rules also appear in

16 C.F.R. Parts 801 through 803. For more information concerning

the development of the rules and operating procedures of the

premerger notification program, see the second, third and seventh

annual reports covering the years 1978, 1979 and 1983, -

respectively.

2 48 Fed. Reg. 34,427 (1983) (codified at 16 C.F.R. Parts

801 through 803).

3 52 Fed. Reg. 7,066 (1987) (codified at 16 C.F.R. Parts

801 through 803).

‘ 52 Fed. Reg. 20,058 (1987) (codified at 16 C.F.R. Parts

801 through 803).

5 The term “transactions", as used in Appendices A, B,

and C, and Exhibit A to this report, does not refer to separate

mergers or deals; rather, it refers to types of structures such

as cash tender offers, options to acquire voting securities from

the issuer, options to acquire voting securities from someone

(continued...)

filings received, the number of merger investigations in which

requests for additional information or documentary material

(hereinafter referred to as “second requests") were issued, and

the number of transactions in which requests for early

termination of the waiting period were received, granted, and not

granted. Appendix A also shows for calendar years 1981 through

1984 and fiscal years 1985 through 1991 the number of

transactions in which second requests could have been issued.

(This information appears in Appendix C and is explained in

footnote 1 of that appendix.) Appendix B provides a month-bymonth comparison of the number of filings received (Table 1) and

the number of transactions reported (Table 2) for fiscal years

1979 through 1991. Appendix C shows, for calendar years 1981

through 1984 and fiscal years 1985 through 1991, the number of

transactions in which the agencies could have issued second

requests, the number of merger investigations in which second

requests were issued, and the percentage of transactions in which

second requests were issued. As we explained in the Eighth

Annual Report, we believe that Appendix C provides a more

meaningful measure of the second request rate than Appendix A

because Appendix C eliminates from the total number of

transactions certain transactions in which the agencies could

not, Or as a practical matter would not, issue second requests.

The statistics set out in these appendices show that the

number of transactions reported in 1991 decreased approximately

32.4 percent from the number of transactions reported in 1990

(1,529 transactions were reported in 1991 while 2,262 were

*(...continued)

other than the issuer, and multiple acquiring or acquired persons

that necessitate separate HSR identification numbers to track the

filing parties and waiting periods. A particular merger or deal

may involve more than one transaction. Indeed, some have

involved as many as four or five transactions.

§ See Appendix C, note 1. As we explained in the

Eleventh, Twelfth and Thirteenth Annual Reports, the information

regarding second requests in Appendices A and C differs from that

reported in those appendices in the annual reports for fiscal

years 1979-1987. Appendix A and C in prior reports identified

the number of transactions in which a second request was issued,

while Appendices A and C in the present report show the number of

merger investigations in which second requests were issued. A

merger investigation may include several transactions. We

believe that reporting the number of merger investigations in

which second requests were issued better reflects the agencies '

enforcement activities because it represents the number of

mergers or acquisitions that were investigated to this extent

under the Act by the agencies.

reported in 1990). The statistics in Appendix A also show that

the number of merger investigations in which second requests were

issued in 1991 decreased approximately 28.1 percent over the

number of merger investigations in which second requests were

issued in 1990 (second requests were issued in 64 merger

investigations in 1991 while second requests were issued in 89

merger investigations in 1990). These numbers indicate an

increase in the number of second requests issued as a percentage

of reported transactions from 1990 to 1991 (from 3.9 percent in

1990 to 4.2 percent in 1991 based on Appendix A, and from 4.6

percent in 1990 to 4.7 percent in 1991, based on Appendix C).

The statistics also show that in recent years, early

termination was requested for most transactions. In 1991, early

termination was requested in 86.4 percent (1,321) of the

transactions reported, while in 1990 it was requested in 87.3

percent (1,975) of the transactions reported. The number of

requests granted decreased in 1991 compared to 1990 (from 1,299

in 1990 to 907 in 1991). However, the percentage of requests

granted increased (from 65.8 percent in 1990 to 68.7 percent in

1991). —

We have also included in the report, as Exhibit A,

statistical tables (Tables I - XI) containing information about

the agencies' enforcement interest in transactions reported in

fiscal year 1991. The tables provide, for various statistical

break downs, the number and percentage of transactions in which

clearances to investigate were granted by one antitrust agency to

the other and the number of merger investigations in which second

requests were issued; the number of transactions based on the

dollar value of transactions reported and the reporting threshold

indicated in the notification; the number of transactions based

on the sales or assets of the acquiring person or the sales or

assets of the acquired entity; and the number of transactions

based on the industry group (2-digit SIC code) in which the

acquiring person or the acquired entity derived most of their

revenues. These statistics have been included in prior annual

reports for the calendar years 1981-1984, and for fiscal years

1985-1990 (excluding 1986).

? See the Thirteenth Annual Report, Exhibit A, for fiscal

year 1990 transactions; the Twelfth Annual Report, Exhibit A, for

fiscal year 1989 transactions; the Eleventh Annual Report,

Exhibits A and B, for fiscal years 1987 and 1988 transactions;

the Tenth Annual Report, Exhibit A, for fiscal year 1985

transactions; the Ninth Annual Report, Exhibit A, for calendar

year 1984 transactions; the Eighth Annual Report, Exhibit A, for

calendar year 1983 transactions; the Seventh Annual Report,

Exhibit B, for calendar year 1982 transactions; and the Sixth

Annual Report, Exhibit A, for calendar year 1981 transactions.

(continued...)

* 7, ute FISCAL y aan L_RELATI

1. - - ino merge tificatio fe) uides

On February 7, 1991, the Commission released two guides

regarding the Hart-Scott-Rodino Premerger Notification Program.

Guide I presents a basic introduction to the premerger

notification program. It provides an overview of the program,

describing in general what transactions are covered by the

program and how the program operates. Guide II explains how to

determine whether a transaction is subject to premerger

notification and waiting requirements. It deals with more

specific questions concerning the application of the Act and the

premerger notification rules.

Guides I and II are the first and second in a planned series

of six informational pieces. The series is designed to provide

general information about the program to businessmen and lawyers

to promote compliance with the program's requirements. Neither

Guide constitutes an interpretation, formal or informal, of the

Act or of the Commission's Premerger Notification Rules.

2.

On July 31, 1991, the Department of Justice and the

Commission entered into a Memorandum of Agreement with respect to

the handling of civil penalty actions under Section 7A(g)(1) of

the Act” for violations of the Act and/or the premerger

notification rules. The agreement reflects the close and

cooperative relationship of the two antitrust enforcement

agencies and is designed to achieve effective deployment of the

Government's resources and assure consistent approaches to

enforcement of the Act's requirements.

Under the Agreement, the Commission will submit civil

penalty recommendations to the Department. Within 45 days, the

Department will advise the Commission that it: (1) will file the

recommended action; (2) disapproves the recommended action; or

(3) requires further information. If the Department does not

communicate one of these determinations to the Chairman of the

Commission within 45 days, the Chairman may designate Commission

”(...continued)

Due to resource constraints, statistics for fiscal 1986

transactions have not been prepared.

8 See Exhibit B for copies of Guides I and II.

9 See Exhibit C for a copy of the Memorandum of

Agreement.

attorneys for appointment by the Attorney General to file the

case in federal court on behalf of the United States. Under the

Agreement, the Attorney General will retain full authority to

make, decline to make, or revoke such appointments and also will

retain control over the ensuing litigation, including approval of

any proposed settlement agreements with defendants.

The Agreement does not affect the ability of either agency

to bring suits seeking injunctions under Section 7A(g)(2) of the

Act. In cases in which the Department designates Commission

attorneys to prosecute civil penalty actions, the Commission

attorneys will be appointed by the Attorney General as Special

Attorneys or Special Assistant United States Attorneys.

3. International Agreement to Cooperate in

et W

On September 23, 1991, the Commission and the Department,

representing the United States, signed an agreement with the

European Community designed to promote cooperation and

coordination in the enforcement of their competition laws.

The agreement will enable the United States and the EC to

exchange information between their governmental competition or

antitrust authorities to lessen the possibility or impact of

differences between the EC and the United States in the

application of their respective laws. Under the terms of the

agreement, each party will notify the other whenever its

competition authorities become aware that their enforcement

activities may affect important interests of the other party.

With respect to mergers, acquisitions or other competition

matters, this notification will occur far enough in advance of

any type of official action -- or early enough in an

investigation -- to enable the other party's views to be taken

into consideration. The agreement also provides that the

competition agencies of the United States and the EC will

coordinate and provide mutual assistance in enforcement

activities to the extent that their laws are compatible and

within available resources.

To avoid conflict over enforcement activities, the United

States and EC have agreed to take into account the important

interests of each other at all stages in their enforcement

activities. Factors to be considered include:

- whether the alleged anticompetitive activities will affect

consumers, suppliers or competitors within the enforcing party's

territory; and

~

0 See Exhibit D for a copy of the bilateral agreement.

6

- the degree of conflict or consistency between the

enforcement action and the other party's laws or economic

policies.

The agreement also contains a provision regarding the

confidentiality of information. It provides that neither party

is required to disclose information that it is prohibited by law

from disclosing. It also provides for the maintaining of

confidentiality of information shared pursuant to the agreement.

4. Compliance

The Commission and the Department of Justice continue to

monitor compliance with the premerger notification program's

filing requirements and initiated a number of investigations to

assure compliance in fiscal year 1991. The agencies monitor

compliance through a variety of methods, including the review of

newspapers and industry publications for announcements of

transactions that may not have been reported in accordance with

the requirements of the Act. Industry sources, such as

competitors, custqners and suppliers, and interested members of

the public often provide the agencies with information about

transactions and possible violations of the filing requirements.

As a result of the agencies' efforts to assure compliance,

the Department of Justice filed seven complaints, five of which

were filed at the Commission's request, in fiscal year 1991. The

complaints alleged violations of the Act and sought civil

‘penalties under Section 7A(g)(1) of the Act.”

In United States v. Reliance Group Holdings,

Incorporated,’* the Antitrust Division filed a complaint at the

Commission's request alleging that Reliance had violated the Act

when it acquired voting securities of Spectra-Physics, Inc., of

San Jose, California. The complaint alleged that Reliance was in

violation of the Act from August 27, 1986, when its holdings of

Spectra-Physics stock exceeded the $15 million threshold, through

at least February 15, 1987. Reliance filed premerger

notification for the acquisition of Spectra-Physics' stock on

January 16, 1987, but withdrew it on February 13. The complaint

alleged that Reliance's acquisitions of Spectra-Physics' stock

were in violation of the Act because they were not made solely

for the purpose of investment as contended by Reliance. Under

uM Under Section 7A(g)(1) of the Act, any person or

company that fails to comply with the Act's notification and

waiting period requirements is liable for a civil penalty of up

to $10,000 for each day the violation continues. .

12 United States v. Reliance Group Holdings, Incorporated,

Cv. No. 90-2698 (D.D.C. filed October 31, 1990).

7

the terms of the final judgment, Reliance agreed to pay 4 civil

penalty of $550,000 to settle the charges.

In United States V-. General Cinema Corporation,” the

Antitrust Division filed a complaint at the Commission's request

alleging that General Cinema had violated the Act when it

acquired voting securities of Cadbury Schweppes plc of London,

England. The complaint alleged that General Cinema was in

violation from September 11, 1986, when its holdings of Cadbury

Schweppes' stock exceeded the $15 million threshold, until

February 25, 1987. General Cinema filed its premerger

notification form under the Act on January 26, 1987, and the

waiting period expired February 25. The complaint alleged that

General Cinema's acquisitions of Cadbury Scheppes' stock were in

violation of the Act because they were not made solely for the

purpose of investment as General Cinema contended. Under the

terms of the final judgment, General Cinema agreed to pay 4 civil

penalty of $950,000 to settle the case.

In United States v. Service Corporation International,™

the Antitrust Division filed a complaint at the Commission's

request alleging that Service Corporation International ("SCI")

had violated the Act when it acquired the voting securities of

Centurion National Group, Inc. The complaint alleged that SCI

violated the Act on December 30, 1986, when it acquired Centurion

through an agent without filing a premerger notification. SCI

filed premerger notification on January 27, 1987, to acquire the

stock of Centurian from its agent. Under the terms of the final

judgment, SCI agreed to pay 4 civil penalty of $500,000 to settle

the charges.

In United States v. Equity Group Holdings,” the Antitrust

Division filed a complaint at the Commission's request alleging

that Equity Group, 4 partnership equally controlled by Steven M.

Rales and Mitchell P. Rales, had violated the Act when it

acquired the voting securities of Interco, Inc. The complaint

alleged that Equity Group was in violation of the Act from May

18, 1987, when its holdings of Interco stock exceeded the $15

million threshold, through November 25, 1987. Equity Group

acquired Interco's stock through May 24. The complaint also

alleged that on May 24 the Rales brothers, through two whollyowned corporations, and two associates formed a limited

3 United States v. General Cinema Corporation, Cv. No.

14

United States v. Service Corporation International, Cv.

No. 91-0025 (D.D.C. filed January 14, 1991).

6 United States v. Equity Group Holdings, Cv. No. 91-0153

(D.D.c. filed January 25, 1991).

8

partnership (City Capital Associates Limited Partnership) that

continued to acquire Interco shares in violation of the Act. On

November 10, 1988, City Capital filed premerger notification to

acquire 100 percent of Interco's stock. The complaint alleged

that the use of two corporations as 49 percent owners of the

limited partnership was an avoidance device under Section 801.90

of the premerger notification rules. Under the terms of the

final judgment, Equity Group agreed to pay a civil penalty of

$850,000 to settle the charges.

In United States v. The Atlantic Richfield Company, ARCO

Chemical Company, Union Carbide Corporation and Union Carbide

Chemicals & Plastic Co. Inc., the Antitrust Division filed a

complaint at the Commission's request alleging that Atlantic

Richfield ("ARCO") had violated the Act when it acquired

beneficial ownership of the assets of Union Carbide Chemicals and

Plastic Co. from Union Carbide. The complaint alleged that on

September 27, 1989, ARCO and Union Carbide entered into an

Carbide the assets of Union Carbide Chemicals. The complaint

alleged that upon execution of the agreement, ARCO paid Union

Carbide the full agreed-upon purchase price and, thereafter,

Union Carbide continued to operate the assets; the purchase price

would be increased or decreased to reflect the loss or profit

reported by the assets; and the assets would be sold, with the

proceeds to ARCO, should ARCO not receive government clearance

for the transaction. The complaint further alleged that the

acquisition agreement, upon execution, had the effect of

' transferring beneficial ownership of the assets to ARCO. Both

parties subsequently filed premerger notification for the

acquisition. Under the terms of the final judgment, ARCO and

Union Carbide each agreed to pay a civil penalty of $1 million to

settle the charges.

In United States v. Cox Enterprises, Incorporated," the

Antitrust Division alleged in the complaint that Cox had violated

the Act when it acquired voting securities of Knight-Ridder Inc.

of Miami, Florida. The complaint alleged that Cox was in

violation of the Act for the 367 days that it held in excess of

$15 million worth of Knight-Ridder voting securities as a result

of a series of stock purchases that Cox made from January 27

through November 20, 1986, until the stock was sold on January

16 United States v. The Atlantic Richfield Company, ARCO

Chemical Company, Union Carbide Corporation and Union Carbide

Chemicals & Plastic Co. Inc., Cv. No. 91-0205 (D.D.C. filed

January 31, 1991). -

v7 United States v. Cox Enterprises, Incorporated, Cv. No.

91-505 (N.D.Ga. filed March 8, 1991).

9

28, 1987. Under the terms of the final judgment, Cox agreed to

pay a civil penalty of $1,750,000 to settle the case.

In United States v. Aero Limited Partnership, c/o Trans

World Airlines, tInc.,** the Antitrust Division filed suit

alleging that the defendant was in violation of the Act from

August 13, 1986, through March 24, 1987, with respect to its

acquisitions of USAir stock. Aero is a partnership that owns the

majority interest in Trans World Airlines. The complaint alleged

that Aero's acquisitions of USAir stock during the period from

August 13, 1986, through March 6, 1987, were not solely for the

purpose of investment. Under the terms of the final judgment,

Aero agreed to pay 4 civil penalty of $1,125,000 to settle the

case.

The Antitrust Division filed four complaints in merger cases

during fiscal year 1991.” Three of these cases, U.S. v. Pirst

Hawaiian, Inc. and First Interstate of Hawaii, Inc., U.S. Vv.

Fleet /Norstar Financial Group, Inc., and U.S. Vv. General Binding

Corporation and VeloBind Incorporated were settled by the entry

of consent decrees.

A preliminary injunction was sought in one case, U.S. V.

Nippon Sanso K.K., Matheson Gas Products, Inc., Hercules

8. United States v. Aero Limited Partnership, c/o Trans

World Airlines, Inc., Cv. No. 91-1315 (D.D.C. filed May 30,

9 The cases mentioned in this report were not necessarily

reportable under the premerger notification program. Because of

the Act's provisions regarding the confidentiality of the

information obtained pursuant to this program, it would be

inappropriate to identify which cases were initiated under the

premerger notification program. °

20 United States v. First Hawaiian, Inc. and First

Interstate of Hawaii, Inc., Cv. No. 90-00904 DAE (D. Hawaii filed

December 28, 1990); United States V. Nippon Sanso K.K., Matheson

Gas Products, Inc., Hercules Incorporated and Semi-Gas Systems,

Inc., Cv. No. 91-0041 (E.D.Pa. filed January 3, 1991); United

States v. Fleet/Norstar Financial Group, Inc., Cv. No. 91-0221-P

(D.Me. filed July 5, 1991) and United States v. General Binding

Corporation and VeloBind Incorporated, Cv. No. 91-1822 (D.D.C.

filed July 24, 1991).

10

Incorporated, and Semi-Gas Systems, Inc. The Division's

complaint challenged the proposed $23 million acquisition of

Semi-Gas Systems of San Jose, California, by Nippon Sanso of

Tokyo, Japan. The complaint alleged that the acquisition would

lessen competition substantially in the production and sale of

gas cabinets in the United States. Gas cabinets are used to

distribute specialty gases for semiconductor fabrication. The

complaint also alleged that the acquisition would combine the two

leading producers of gas cabinets in the world and substantially

increase Semi-Gas Systems' dominant position in the United States

market. Nippon Sanso produces gas cabinets in the United States

through a wholly owned subsidiary, Matheson Gas Products of

Secaucus, New Jersey. On March 26, 1951, after a hearing on the

government's motion for a preliminary injunction, the district

court denied the government's motion. Thereafter, the case was

dismissed.

In United States v. First Hawaiian, Inc. and First

Interstate of Hawaii, Inc., the Division challenged the proposed

acquisition of First Interstate of Hawaii, Inc., the fourth

largest bank in Hawaii, by First Hawaiian, Inc., the second

largest bank in Hawaii, for approximately $140 million. Both

parties are located in Honolulu, Hawaii. On October 5, 1990, the

Department advised the Federal Reserve System that the

acquisition was likely substantially to lessen competition. The

acquisition was approved by the Federal Reserve Board on November

30, 1990. The complaint alleged that the transaction would

lessen competition in the provision of business banking services

in five geographic markets in Hawaii - Honolulu County, East

Hawaii, West Hawaii, Kauai and Maui. Business banking services

are services, such as checking accounts and loans, offered to

business customers. On March 7, 1991, a consent decree settling

the case was filed. The consent decree directed the defendants

to relinquish all control and use of the "First Interstate

System" franchise license and to divest certain bank branch

assets and deposits on each of the four major islands of Hawaii.

The sale of the bank branches to financial institutions that do

not currently have significant competitive presences in each of

the relevant markets, along with the relinquishment of control

and use of the First Interstate System franchise license, was

designed to provide structural relief so as to ensure that the

markets remain competitive after the acquisition. A buyer has

been approved by the Division and is awaiting bank regulatory

approval to operate as a bank. ;

In United States v. Fleet /Norstar Financial Group, Inc., the

Division challenged the proposed acquisition of the New Maine

National Bank of Portland, Maine, by Fleet/Norstar Financial

Group, Inc., of Providence, Rhode Island. Simultaneously, a

consent decree was filed. New Maine was one of three “pridge"

banks created by the Federal Deposit Insurance Corporation (FDIC)

in its capacity as receiver of the failed Bank of New England

11

Corporation. In April, the FDIC announced it would sell the

three bridge banks to Fleet /Norstar. The acquisition was

approved by the Board of Governors of the Federal Reserve System

on July 1, 1991. The complaint alleged that the transaction

would lessen competition in the provision of business banking

services such as checking accounts and loans to small and mediumsize businesses in Bangor, Presque Isle-Caribou and pittsfield,

Maine. The consent decree directs Fleet/Norstar to divest

certain bank branch assets and deposits in Bangor, Presque Isle-

Caribou and Pittsfield. Division review of a proposed purchaser

is currently pending.

In United States v. General Binding Corporation and VeloBind

Incorporated, the Division challenged the proposed acquisition of

veloBind Inc. of Freemont, California, by General Binding

Corporation of Northbrook, Illinois. The Department had

announced on December 28, 1990, that it would file a civil

antitrust suit challenging the proposed acquisition because, as

then structured, it would have violated Section 7 of the Clayton

Act since the prop sed acquisition would likely lessen

feially in the high-volume mechanized binding

machine market in the United States. High-volume mechanized

binding machines are electric machines that can easily and

securely bind numerous documents in 4 professional-looking

manner. General Binding's United States sales of high-volume

binding machines in 1989 were about $17 million. VeloBind, the

only manufacturer of plastic strip-binding machines for sale in

the United States, sold about $5 million of such machines in this

country in 1989. Together, the two firms accounted for about 88

percent of all domestic sales of high-volume mechanized binding

machines. Pursuant to a consent decree filed simultaneously with

the complaint, the transaction was restructured. By means of a

supply agreement and license agreement, General Binding

established Gestetner Corporation of Greenwich, Connecticut, as 4

competing seller of these plastic strip-binding machines and

supplies. The consent decree requires General Binding to notify

the Department 60 days prior to making any modification,

cancellation, rescission, Or amendment to the supply and license

agreements. General Binding cannot proceed with any such

modification, cancellation, rescission, or amendment without the

written permission of the Department. The decree also enjoins

General Binding and Gestetner from discussion or exchanging any

information relating to the prices at which General Binding or

Gestetner will sell high-volume binding machines and related

supplies. S

In one case brought in fiscal year 1990, United States v.

United Tote, Inc., the district court entered judgment on May

-~

2 United States v. United Tote, Inc., 768 F.Supp. 1064

(D.Del. filed March 14, 1990; judgment entered May 10, 1991).

12

10, 1991, in favor of the United States and ordered United Tote

to divest all of its direct and indirect ownership and control of

Autotote. The suit challenged the acquisition of Autotote

Systems Inc. of Newark, Delaware, by United Tote, Inc., of

Shepherd, Montana, and is described more fully in the Thirteenth

Annual Report. Divestiture was completed on October 31, 1991.

Additionally, two consent decrees were entered in cases

brought in fiscal year 1990.

During fiscal year 1991, the Division investigated one bank

merger transaction for which divestiture was required prior to or

concurrently with the acquisition. The transaction involved the

acquisition of four New Mexico banks from First Interstate

Bancorp, Los Angeles, California, by United New Mexico Financial

Corporation, Albuquerque, New Mexico. A “not significantly

adverse" letter conditioned on divestiture prior to or

concurrently with consummation of the transaction was sent to the

Board of Governors of the Federal Reserve System on March 26,

1991, and to the Federal Deposit Insurance Corporation on April

19, 1991.

Finally, on nine occasions during fiscal year 1991 the

Antitrust Division informed the parties to a proposed transaction

that it would file suit challenging the transaction unless the

parties restructured the proposal to avoid competitive problems

or abandoned the proposal altogether.” In all instances, the

22 United States v. American Safety Razor Company, et al.,

Cv. No. 90-0188 (E.D.Pa. consent decree filed October 24, 1990,

and entered February 22, 1991); United States v. Brown & Root,

Inc., et al., Cv. No. 90-1986 (D.D.C. consent decree entered

November 16, 1990). These cases and consent decrees are

discussed in the Thirteenth Annual Report.

23 Department of Justice Press Release issued December 17,

1990, involving Unimin Corporation's proposed acquisition of

Indusmin, Inc.; Department of Justice Press Release issued

December 20, 1990, involving ECC Group plc's proposed acquisition

of Georgia Kaolin Company from Combustion Engineering;

Department of Justice Press Release issued February 14, 1991,

involving various airlines', including Delta, United, Northwest

and American, proposed acquisitions of Eastern Airlines assets;

Department of Justice Press Release issued March 25, 1991,

involving Hershey Foods Corporation's acquisition of American

Italian Pasta Company; Department of Justice Press Release

issued March 25, 1991, involving Caterpillar, Inc.'s, proposed

acquisition of the paving equipment of Barber-Greene Company from

Astec Industries, Inc.; Department of Justice Press Release

issued April 12, 1991, involving Fiat Group's proposed

(continued...)

13

parties either restructured or abandoned the proposed

transactions. .

On May 10, 1991, the Department announced that it would not

sue to enjoin consummation of the cash tender offer by Schneider

S.A. of Paris, France, for the common stock of Square D Company

of Palatine, Illinois.

2. Federal Trade Commission

The Commission authorized its staff to seek preliminary

injunctions in seven merger cases in fiscal year 1991. In four

of these cases, the parties abandoned the transaction before the

motion for preliminary injunction was filed in court.” In one

3’, , .continued)

acquisition of Ford Motor Company's Farm Equipment Operations;

Department of Justice Press Release issued April 25, 1991,

involving AMR Corporation's proposed acquisition of Trans World —

Airlines, Inc.'s, International Route Authority; Department of

Justice Press Release issued July 26, 1991, involving Fairmount

Minerals, Ltd.'s, proposed acquisition of Hepworth Minerals and

Chemicals, Inc. In one instance, involving Overseas Shipholding

Group, Inc.'s, proposal to acquire seven U.S. Flag tankers from

American Trading and Production Corporation, the parties issued a

press release announcing the Department's objection after the

Division informed the parties of its opposition to their proposed

acquisition.

24 FTC news release issued November 9, 1990, involving the

proposed acquisition by Ingersoll-Rand Company of Universal

Bearings, Inc. The press release reported that the Commission

had reason to believe the acquisition would lessen competition

substantially in the manufacture and sale of needle rollers.

Needle rollers are cylindrical steel parts, built to exacting

specifications, that are used for anti-friction purposes in

bearings and a variety of other products, such as automobile

transmissions, drive shafts, and power steering units.

Ingersoll-Rand and Universal were the two largest producers of

needle rollers in the United States. Although the parties

abandoned the transaction, a final consent agreement places

restrictions on future acquisitions in the industry by either

party.

FTC news release issued January 18, 1991, involving the

proposed acquisition by Oy Wartsila Ab of Computerized Security

Systems, Inc., and Winfield Lock, Inc. (collectively "CSS"). The

press release reported that the Commission had reason to believe

that the acquisition would reduce competition substantially in

the manufacture and sale of recodable hotel lock systems.

(continued...)

14

of the abandoned transactions, the parties subsequently

restructured the transaction to eliminate the portions which

raised antitrust concerns.” In another transaction the parties

abandoned the transaction after the motion for preliminary

injunction was filed in court.

*“(...continued)

Recodable locks are those that can be changed after a person

lock) or electronically and automatically as each new guest card

is issued. Wartsila's wholly-owned subsidiary, VingCard Systems,

Inc., and CSS were two of the leading suppliers of recordable

hotel lock systems in the world.

FTC news release issued May 23, 1991, involving the

proposed acquisition by Instruments SA, of the Molecular Beam

Epitaxy Equipment Division of INTEVAC, Inc. The press release

reported that the Commission had reason to believe that the

advanced semiconductor devices for high speed and optoelectronic

devises, such as lasers, transistors, night vision devices and

FTC news release issued August 8, 1991, involving the

proposed acquisition by EG&G, Inc., of Heimann GmbH. The press

the United States. Electronic x-ray screening equipment is

commonly found in airports and high-security areas. EG&G was the

industry leader in the U.s. and worldwide markets. Over a period

2 See footnote 24 involving the proposed acquisition by

EG&G, Inc., of Heimann GmbH. a,

26 FIC news release issued March 8, 1991, involving the

proposed acquisition by Wiggins Teape Appleton, p.l.c., of a

Vancouver, Washington, paper mill owned by Boise Cascade

. (continued...)

~

15

In Federal Trade Commission v. Meade Instruments Corporation

and Celestron International,” the Commission filed for a

preliminary injunction alleging that the proposed joint venture

between Meade, a wholly-owned subsidiary of Harbour Group

Investments, L.P., and Celestron, a wholly-owned subsidiary of

Diethelm & Co., Ltd., of Switzerland, would create a virtual

monopoly in the manufacture and sale of mid-size Schmidt-

Cassegrain telescopes. These telescopes use mirrors and lenses

and are suited for observation of both nearby planets and deepsky objects, as well as for astrophotography. They are generally

used by “serious amateur" astronomers and usually cost $1,000 or

more. Meade and Celestron were the two largest producers of such

telescopes. On November 8, 1990, the district court granted the

Commission's motion for a preliminary injunction. The Commission

also issued an administrative complaint. Subsequently, Meade and

Celestron agreed to settle the charges... On August 19, 1991, the

Commission issued a decision and order.”* The order requires

Harbour Group and Diethelm to obtain Commission approval, for a

period of ten years, before acquiring any company that has

manufactured or sold these telescopes in the United States, or is

considering doing so. <

In Federal Trade Commission v. University Health, Inc.,”

the Commission filed for a preliminary injunction alleging that

University Health's acquisition of St. Joseph Hospital would

6’, . .continued)

Corporation. The press release reported that the Commission had

reason to believe that the acquisition would lessen competition

substantially in the production of chemical carbonless paper in

the United States. Chemical carbonless paper is coated paper

that enables writing on the top page to be copied onto pages

underneath without the use of carbon paper. It is used in many

business forms, including credit-card slips. In 1989, Appleton

was the largest U.S. producer of chemical carbonless paper and

Boise was the fourth largest.

27 «Federal Trade Commission v. Meade Instruments

Corporation and Celestron International, 1990-2 Trade Cases

q 69,247 (D.D.C. filed October 15, 1990; preliminary injunction

order entered November 8, 1990).

28 = =Meade Instruments Corporation and Celestron

International, Docket No. D.9244 (complaint issued November 29,

1990; decision and order issued August 19, 1991).

29 Federal Trade Commission v. University Health, Inc.,

1991-1 Trade Cases ¢ 69,508 (11th Cir. 1991), rev'g 1991-1 Trade

Cases ¢ 69,400, ¢ 69,444 (S.D.GA filed March 20, 1991;

preliminary injunction denied, April 4, 1991).

16

lessen competition substantially for acute care hospital services

in the Augusta, Georgia, area. The complaint alleged that the

market for general acute care hospital services in Augusta was

highly concentrated, and that it was difficult for new hospitals

to enter the market because of state regulations requiring a

certificate-of-need and the substantial amount of time required

to establish a new hospital. The district court denied the

preliminary injunction on April 4, 1991. The Commission appealed

the decision to the United States Court of Appeals for the

Eleventh Circuit which reversed the district court and ordered

that a preliminary injunction be issued, The Commission issued a

decision and order in fiscal year 1992.

In fiscal year 1991, the Commission also issued one

administrative complaint in a matter in which the United States

District Court had denied the Commission's motion for preliminary

injunction filed in fiscal year 1990.

In R.R. Donnelley & Sons Co.,*) the Commission's motion for

preliminary injunction alleged that Donnelley's proposed

acquisition of Meredith/Burda companies would lessen competition

substantially in high volume publication rotogravure printing in

the United States and the western United States. On August 27,

1990, the district court denied the Commission's motion for a

preliminary injunction. The Commission issued an administrative

complaint on October 11, 1990. The complaint alleges that as

a result of its acquisition of Meredith/Burda, Donnelley has

achieved the power and position of a dominant firm in the market

.for high volume publication gravure printing in the continental

‘United States as well as in a twelve-state region west of the

Rockies. Also, the complaint alleges that the acquisition has

increased the likelihood of successful anticompetitiye conduct,

nonrivalrous behavior, and actual or tacit collusion among the

remaining companies in those markets.

During fiscal year 1991, the Commission accepted consent

agreements for public comment in seven merger matters. The

Commission issued a complaint and decision and order in two of

those cases during the fiscal year and in four of the other cases

after the end of the fiscal year. One case is still pending.

7 University Health, Inc., Docket No. D.9246 (order

issued June 23, 1992).

3 Federal Trade Commission v. R. R. Donnelley & Sons Co.,

1990-2 Trade Cas. q 69,240 (D.D.C. filed August 27, 1990;

preliminary injunction denied August 27, 1990).

32 R. R. Donnelley & Sons Co., Docket No. D.9243

(complaint issued October 11, 1990).

17

In Allegheny Corporation/New TC Holding,” the complaint

alleged that Allegheny's acquisition (through its subsidiary

Chicago Title & Trust Company) of the title insurance-related

assets of Westwood Equities Corporation (a subsidiary of New TC

Holding Corporation) would lessen competition substantially in

the provision of title plant and back plant information in

California, Illinois, Indiana, Tennessee, and Washington. Title

plants and back plants are privately-owned sets of records

depicting who owns and has interests in real property. A title

plant's records are regularly updated, whereas the records of a

back plant are historical, frequently dating back to the early

part of the century. Under the order, Allegheny was required to

divest, within 12 months, all rights in:

-- either its own title plant or Westwood's in Imperial

County, California; in Du Page County, Lake County, and Will

County, Illinois; in Johnson County, Lake County, and Porter

County, Indiana; and in Benton County and Franklin County,

Washington; and

-- either its own back plant or Westwood's in Orange County,

Riverside County, San Bernardino County, San Luis Obispo

County, Santa Barbara County, and Tulare County, California;

in Cook County, Illinois; in Marion County, Indiana; and in

Davidson County, Tennessee. :

lifts in the United. States. Under the order, Cheney must grant a

production of these lifts, and a license to Cheney's trade names,

to a Commission-approved licensee within a year. In addition,

for five years, Stair-Glide and Cheney are prohibited from

marketing products under the Cheney name and will not be able to

enter into exclusive agreements limiting distributors’ ability to

sell the straight and curved stairway lifts or vertical

wheelchair lifts of any other manufacturer.

In PepsiCo, Inc./Twin Ports Seven-Up,” the complaint

alleged that PepsiCo's acquisition of Twin Ports Seven-Up

3 Allegheny Corporation/New TC Holding, Docket No. C3335

(issued July 11, 1991).

* American Stair-Glide Corporation, Docket No. C3331

(issued May 17, 1991). .

33 pepsiCo,Inc./Twin Ports Seven-Up, Docket No. C3347

(issued October 15, 1991).

18

Bottling Company would lessen competition substantially in the

carbonated soft drink industry in the Duluth, Minnesota, area.

Under the order, PepsiCo must divest Twin Ports within a nine-

month period.

In RWE Aktiengesellschaft/Vista Chemical Co.,* the

complaint alleged that RWE's acquisition of Vista Chemical

Company would lessen competition substantially in the world

market for high-purity alcohol process alumina. Alumina is used

as an abrasive, as a catalyst for chemical and oil processing,

and in the manufacture of automotive catalytic converters. Under

the order, RWE, within six months, must grant to a licensee the

rights to patents, trade secrets and other information relating

to the processing of this alumina. The licensee would operate a

joint venture in which RWE would hold a minority ownership share.

In Nippon Sheet Glass Company,” the complaint alleged that

Nippon's acquisition of 20 percent of the voting securities of

the Libby-Owens-Ford Company ("LOF"), a subsidiary of Pilkington,

ple, would lessen/competition substantially in the North American

wired glass market. Wired glass is a specialty flat glass used

primarily in shower and bath enclosures and in fire-retarding

applications, such as fire doors. It is made by rolling wire

netting into glass, after which the glass is polished to remove

surface imperfections. All wired glass sold in the United States

is imported. (LOF does not manufacture wired glass.) Under the

order, Nippon and Pilkington are prohibited, for a period of ten

years, from jointly manufacturing, marketing or distributing

polished wired glass through LOF or any other entity in North

America without obtaining the Commission's prior approval.

In Sentinel Group, Inc.,** the complaint alleged that

Sentinel's numerous acquisitions of funeral homes in recent years

substantially lessened competition for funeral services in six

cities in Georgia and Arkansas. Under the order, Sentinel was

required to divest one of its funeral homes in each of Waycross,

Summerville and Gainesville, Georgia. For a period of ten years

Sentinel is prohibited from acquiring any additional funeral

homes in Waycross, Summerville, Gainesville, Savannah, and Rome,

Georgia, and Fort Smith, Arkansas, without obtaining the

Commission's prior approval.

36 RWE Aktiengesellschaft/Vista Chemical Co., Docket No.

C3349 (issued October 29, 1991).

37. «Nippon Sheet Glass Company, Docket No. C3346 (issued

October 7, 1991). .

38 Sentinel Group, Inc., Docket No. C3348 (issued October

23, 1991).

19

In Service Corporation International,” the complaint

alleged that Service Corporation International's ("SCI")

acquisition of the Sentinel Group, Inc., would lessen competition

substantially among funeral establishments in areas of Georgia

and Tennessee. Under the consent, SCI was permitted to

consummate the acquisition but it was required to hold certain

assets separate until it divested six funeral homes in designated

cities. Under the consent, SCI also would be required to obtain

Commission approval before acquiring any additional funeral homes

in Savannah and LaFayette, Georgia; in Hamilton County

(Chattanooga) Tennessee; and in the Chattanooga suburbs of

Rossville and Fort Ogelthorpe. .

The Commission issued decisions and orders in two merger

cases during fiscal year 1991 involving acquisitions in which the

administrative complaint was issued before October 1, 1990.

The Commission's complaint alleged that Mr. Honickman's

acquisition substantially lessened competition in the production,

distribution and sale of. branded carbonated soft drinks in the

New York Metropolitan area. Under the order, Mr. Honickman and

Brooklyn Beverage are required to obtain the Commission's prior

approval for certain soft drink mergers or acquisitions for a

period of ten years.

In Hoechst AG," Hoechst agreed to settle charges stemming

from its 1987 acquisition of the Celanese Corp. The Commission

alleged in the complaint that Hoechst's acquisition substantially

lessened competition in the manufacture and sale of acetal in

world markets, including the United States. Acetal is an

engineering thermoplastic polymer noted for its hardness,

lubricity, gasoline and chemical resistance, and dimensional

stability. It is used as a replacement for metal in small

mechanical parts such as gears and rollers in automobiles and in

consumer products, including videotape recorders, lawn

sprinklers, pens and disposable lighters. Under the order,

Hoechst is prohibited, for a period of ten years, from entering

into an agreement with any producer of acetal products to

allocate, divide or restrict competition in the market. Although

*9 Service Corporation International, (consent agreement

accepted for public comment July 25, 1991).

“0 Harold Honickman, Docket No. D.9233 (order issued July

25, 1991).

=

“ Hoechst AG, Docket No. D.9216 (order issued September

12, 1991).

20

Hoechst is not required to divest any of its acetal assets or

businesses, the order requires that it remove contractual and

managerial constraints in the joint venture agreement with Daicel

Chemical Industries, Ltd., a Japanese company. The joint

venture, Polyplastics Company, Ltd., owned 45 percent by Hoechst

and 55 percent by Daicel, produces acetal in Japan. The

elimination of these restrictions will allow Daicel and

Polyplastics to expand their acetal business into the U.S.

market, thus restoring the competitive rivalry that once existed

prior to the acquisition.

The Commission issued a decision and order in four merger

cases during fiscal year 1991 in which it had previously accepted

consent agreements for public comment before October 1, 1990.

In E-Z-EM, Inc.,"* E-Z-EM, Inc., ("EZM") agreed to settle

charges that its acquisition of Lafayette Pharmacal, Inc.,

substantially lessened competition and created a monopoly in the

United States market for barium diagnostic products. EZM

manufactured medical products, including barium sulfate products

used by radiologists in x-ray diagnostic applications. Prior to

its acquisition by EZM in 1988, Lafayette manufactured barium

sulfate diagnostic products at its Lafayette, Indiana, plant.

Under the order, EZM agreed to divest all of the assets it

acquired from Lafayette. Also, it agreed to obtain Commission

approval before selling or acquiring assets related to the barium

diagnostic products business or before selling any EZM shares to

anyone already engaged in the business in the United States, or

- acquiring the same assets or interest from anyone already engaged

- in the business in the United States.

In T&N PLC,” TEN PLC ("T&N") agreed to settle charges that

its proposed acquisition of J.P. Industries, Inc., ("JPI") would

lessen competition substantially or tend to create a monopoly in

the manufacture and sale of thinwall and tri-metal heavywall

engine bearings in the United States. T&N and JPI both

manufactured and sold engine bearings. Under the order, T&N was

permitted to complete the acquisition, but it was required to

divest certain assets used in the production, manufacture and

sale of thinwall and tri-metal heavywall engine bearings.

a2 E-Z-EM, Inc., Docket No. C3311 (order issued October

29, 1990).

“3 T&N PLC, Docket No. C3312 (order issued November 8,

1990).

~

21

In Roche Holding Ltd.,"" Roche Holdings Ltd. ("Roche")

agreed to settle charges that its acquisition of a controlling

interest in Genentech, Inc., would lessen competition ;

substantially in certain markets for vitamin C; for therapeutic

drugs for the treatment of growth deficiency, including humangrowth hormone and growth hormone releasing factor; and for CD4-

based therapeutics for: the treatment of AIDS/HIV infection.

Roche is a Swiss pharmaceutical company which had developed and

marketed many pharmaceutical products in the United States and

has conducted extensive research and development in

biotechnology. Genentech is a leading biotechnology company

based in San Francisco. Under the order, Roche was required to

divest either Genentech's interest in GLC Associates (a ’

partnership between Genentech and Lubrizol, which had researched

and patented a new vitamin C production process) or the

partnership's vitamin C assets. Roche also was required to

divest its human growth hormone releasing factor business. In

addition, Roche must license its CD4-based therapeutic United |

States' patents for a modest royalty to anyone who requests a

license for ten years after the date of the final order.

In Atlantic Richfield Company,“ Atlantic Richfield Company

("ARCO") agreed to settle charges that its acquisition of certain

chemical assets of Union Carbide Corporation resulted in a

vertical acquisition that increased barriers to entry and.

eliminated perceived potential and actual potential competition

in the manufacture and sale of propylene oxide ("PO") in the

United States and Canada. Union Carbide is a significant

purchaser of PO, and ARCO is a leading producer of PO. The

Commission stated that the acquisition could reduce substantially

actual horizontal competition in the manufacture and sale in the

United States and Canada of two important products made from PO,

urethane polyether polyol ("UPP") and propylene glycol ("PG").

UPP is the major raw material for polyurethanes, which are used

for such applications as flexible foam (cushions) and rigid foam

(picnic coolers). PG is used in a variety of applications,

including fiberglass, cellophane, paints, anti-freeze, foods,

drugs, and cosmetics. ARCO and Union Carbide were reported to be

leading producers in both of these highly concentrated markets.

Under the order, ARCO was required to divest the PG and UPP

assets and businesses to a Commission approved purchaser within

twelve months. :

Two other matters came before the Commission in fiscal year

1991 involving complaints issued prior to October 1, 1990.

44 Roche Holding Ltd., Docket No. C3315 (order issued

November 28, 1990). .

4S atlantic Richfield Company, Docket No. C3314 (order.

issued November 26, 1990).

22

In The Coca-Cola Bottling Company of the Southwest and Dr.

Pepper /Seven-Up Company,“* Dr. Pepper/Seven-Up Company ("Dr.

Pepper“) agreed to settle charges stemming from the acquisition

by The Coca-Cola Bottling Company of the Southwest ("CCSW") of

certain assets of San Antonio Dr. Pepper Bottling Company from

Dr. Pepper in 1984. The Commission's complaint alleged that

CCSW's acquisition substantially lessened competition in the

production, distribution and sale of carbonated soft drinks in at

least a ten county area, which included San Antonio, Texas.

Under the order, Dr. Pepper agreed not to take actions that would

interfere with any relief the Commission might order if it is

determined that CCSW violated the law. An administrative law

judge subsequently dismissed the complaint against CCSW. The

dismissal is on appeal to the Commission. ;

In Adventist Health System/west ,“’ the Commission reversed

an administrative law judge's order dismissing a complaint in

which the Commission had charged that an acquisition by Ukiah

Adventist Hospital, a nonprofit hospital, of substantially all

the assets of Ukiah Hospital Corp, a nonprofit hospital, would

lessen competition substantially in general acute care hospital

services in the Ukiah, California, area. The judge had held that

the Commission lacked jurisdiction to challenge an assets

acquisition by a nonprofit entity, and dismissed the complaint

without ruling on the antitrust issues. The Commission's action

reverses the judge's order and holds that the Clayton Act gives

the Commission the necessary authority to challenge acquisitions

of assets by nonprofit entities. The case was remanded to the

judge for a decision on the merits.

ASSESSMENT OF THE EFFECTS OF THE PREMERGER NOTIFICATION PROGRAM

Although a complete assessment of the impact of the

premerger notification program on the business community and on

antitrust enforcement is not possible in this limited report, the

following observations can be made.

First, as indicated in past annual reports, one of the

premerger notification program's primary objectives, eliminating

the so-called "midnight merger," has been achieved. The

requirement that parties file and wait ensures that virtually all

“6 The Coca-Cola Bottling Company of the Southwest and Dr.

Pepper/Seven-Up Company, Docket No. D.9215 (order issued, with

respect to Dr. Pepper/Seven-Up Company, on December 20, 1989;

dismissed, regarding The Coca-Cola Bottling Company of the

Southwest, by the administrative law judge on June 14, 1991).

‘“” Adventist Health System/West, Docket No. D.9234

(decision issued August 2, 1991).

23

significant mergers Or acquisitions occurring in the United

States will be reviewed by the antitrust agencies prior to

consummation. The agencies generally have the opportunity to

challenge unlawful transactions before they occur, thus avoiding

the problem of constructing effective post-acquisition relief.

Second, in most cases the parties provide sufficient

information to allow the enforcement agencies to determine

promptly whether a transaction raises any antitrust problems. In

addition, over the years, parties have increasingly supplied

information voluntarily to the Commission and the Antitrust

Division. This cooperation has resulted in fewer second requests

than would otherwise have been necessary.

Finally, the existence of the premerger notification program

alerts businesses to the antitrust concerns raised by proposed

transactions. In addition, the greatly increased probability

that antitrust violations will be detected prior to consummation

may deter some com titively questionable transactions. Prior to

the premerger notification program, businesses could, and

frequently did, co summate transactions which raised significant

antitrust concerns, before the antitrust agencies had the

opportunity to adequately consider their competitive effects.

The enforcement agencies were forced to pursue lengthy postacquisition litigation during the course of which the consummated

transaction continued in place (and afterwards as well, where

effective post-acquisition relief was not possible or available).

Because the premerger notification program requires reporting

before consummation, this problem has been significantly reduced.

The Acting Assistant Attorney General of the Antitrust

Divigion concurs with this annual report.

Insert date wy) 7 ie

24

List of Appendices

Appendix A - Summary of Transactions, Fiscal Years 1979-

1991

Appendix B - Number of Filings Received and Transactions

Reported by Month for Fiscal Years 1979-1991.

Appendix C - Transactions in Which Additional Information

Was Requested for Calendar Years 1981-1984

and Fiscal Years 1985-1991.

List of Exhibits

Exhibit A - Statistical tables for fiscal year 1991,

presenting data profiling Hart-Scott-Rodino

premerger notification filings and

enforcement interest.

Exhibit B - Hart-Scott-Rodino Premerger Notification

Program Guides I and II.

Exhibit C - Memorandum of Agreement with respect to the

handling of civil penalty suits enforcing the

premerger notification provisions of the

Hart-Scott-Rodino Act.

Exhibit D - International agreement to cooperate in

enforcement of competition laws.

25

Appendix A

Summary of Transactions;

Fiscal Years 1979-1991

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