HSR Auto-Withdraw Justification for Non-Material Change

Justification for Non-Material Change
Calculating the burden for the auto-withdrawal amendments in §803.12(b) of the HSR Rules
requires an analysis of two potential scenarios. In one scenario, a filing is automatically
withdrawn and the acquiring person utilizes the two-day resubmission process under §803.12(c).
In that case, no additional transaction is generated as the acquiring person simply restarts the
waiting period on the same transaction. In the second scenario, the parties to a terminated
transaction for which the filing is automatically withdrawn do not utilize the two-day
resubmission process under §803.12(c) but later decide to move forward with the transaction. In
that case, a new filing would be required. Both of these scenarios are rare, as it is very unlikely
that a transaction for which the HSR filing is automatically withdrawn during the merger review
process (due to the parties’ SEC filing indicating that the transaction has been terminated) would
be subsequently restarted. Based on past experience, this would occur approximately once every
fifteen years. If the parties to such a transaction do not utilize the two-day resubmission process,
the rule change would require non-index HSR filings for, on average, a small fraction of a single
transaction per year. The currently cleared estimate for a single non-index filing is 37 hours.
See 76 FR 42471, 42479 (July 19, 2011). FTC staff believes that this new filing would require
the same work and diligence as any new non-index filing. Assuming, then, an average of 37
hours for one transaction, when applied to a traditional frequency of .067 (one every fifteen
years), this amounts to an annual average of 3 hours, rounded up.