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U.S. Code as of:
01/19/04
Section 18a. Premerger notification and waiting period
(a) Filing
Except as exempted pursuant to subsection (c) of this section, no
person shall acquire, directly or indirectly, any voting securities
or assets of any other person, unless both persons (or in the case
of a tender offer, the acquiring person) file notification pursuant
to rules under subsection (d)(1) of this section and the waiting
period described in subsection (b)(1) of this section has expired,
if -
(1) the acquiring person, or the person whose voting securities
or assets are being acquired, is engaged in commerce or in any
activity affecting commerce; and
(2) as a result of such acquisition, the acquiring person would
hold an aggregate total amount of the voting securities and
assets of the acquired person -
(A) in excess of $200,000,000 (as adjusted and published for
each fiscal year beginning after September 30, 2004, in the
same manner as provided in section 19(a)(5) of this title to
reflect the percentage change in the gross national product for
such fiscal year compared to the gross national product for the
year ending September 30, 2003); or
(B)(i) in excess of $50,000,000 (as so adjusted and
published) but not in excess of $200,000,000 (as so adjusted
and published); and
(ii)(I) any voting securities or assets of a person engaged
in manufacturing which has annual net sales or total assets of
$10,000,000 (as so adjusted and published) or more are being
acquired by any person which has total assets or annual net
sales of $100,000,000 (as so adjusted and published) or more;
(II) any voting securities or assets of a person not engaged
in manufacturing which has total assets of $10,000,000 (as so
adjusted and published) or more are being acquired by any
person which has total assets or annual net sales of
$100,000,000 (as so adjusted and published) or more; or
(III) any voting securities or assets of a person with annual
net sales or total assets of $100,000,000 (as so adjusted and
published) or more are being acquired by any person with total
assets or annual net sales of $10,000,000 (as so adjusted and
published) or more.
In the case of a tender offer, the person whose voting securities
are sought to be acquired by a person required to file notification
under this subsection shall file notification pursuant to rules
under subsection (d) of this section.
(b) Waiting period; publication; voting securities
(1) The waiting period required under subsection (a) of this
section shall -
(A) begin on the date of the receipt by the Federal Trade
Commission and the Assistant Attorney General in charge of the
Antitrust Division of the Department of Justice (hereinafter
referred to in this section as the "Assistant Attorney General")
of -
(i) the completed notification required under subsection (a)
of this section, or
(ii) if such notification is not completed, the notification
to the extent completed and a statement of the reasons for such
noncompliance,
from both persons, or, in the case of a tender offer, the
acquiring person; and
(B) end on the thirtieth day after the date of such receipt (or
in the case of a cash tender offer, the fifteenth day), or on
such later date as may be set under subsection (e)(2) or (g)(2)
of this section.
(2) The Federal Trade Commission and the Assistant Attorney
General may, in individual cases, terminate the waiting period
specified in paragraph (1) and allow any person to proceed with any
acquisition subject to this section, and promptly shall cause to be
published in the Federal Register a notice that neither intends to
take any action within such period with respect to such
acquisition.
(3) As used in this section -
(A) The term "voting securities" means any securities which at
present or upon conversion entitle the owner or holder thereof to
vote for the election of directors of the issuer or, with respect
to unincorporated issuers, persons exercising similar functions.
(B) The amount or percentage of voting securities or assets of
a person which are acquired or held by another person shall be
determined by aggregating the amount or percentage of such voting
securities or assets held or acquired by such other person and
each affiliate thereof.
(c) Exempt transactions
The following classes of transactions are exempt from the
requirements of this section -
(1) acquisitions of goods or realty transferred in the ordinary
course of business;
(2) acquisitions of bonds, mortgages, deeds of trust, or other
obligations which are not voting securities;
(3) acquisitions of voting securities of an issuer at least 50
per centum of the voting securities of which are owned by the
acquiring person prior to such acquisition;
(4) transfers to or from a Federal agency or a State or
political subdivision thereof;
(5) transactions specifically exempted from the antitrust laws
by Federal statute;
(6) transactions specifically exempted from the antitrust laws
by Federal statute if approved by a Federal agency, if copies of
all information and documentary material filed with such agency
are contemporaneously filed with the Federal Trade Commission and
the Assistant Attorney General;
(7) transactions which require agency approval under section
1467a(e) of title 12, section 1828(c) of title 12, or section
1842 of title 12, except that a portion of a transaction is not
exempt under this paragraph if such portion of the transaction
(A) is subject to section 1843(k) of title 12; and (B) does not
require agency approval under section 1842 of title 12;
(8) transactions which require agency approval under section
1843 of title 12 or section 1464 of title 12, if copies of all
information and documentary material filed with any such agency
are contemporaneously filed with the Federal Trade Commission and
the Assistant Attorney General at least 30 days prior to
consummation of the proposed transaction, except that a portion
of a transaction is not exempt under this paragraph if such
portion of the transaction (A) is subject to section 1843(k) of
title 12; and (B) does not require agency approval under section
1843 of title 12;
(9) acquisitions, solely for the purpose of investment, of
voting securities, if, as a result of such acquisition, the
securities acquired or held do not exceed 10 per centum of the
outstanding voting securities of the issuer;
(10) acquisitions of voting securities, if, as a result of such
acquisition, the voting securities acquired do not increase,
directly or indirectly, the acquiring person's per centum share
of outstanding voting securities of the issuer;
(11) acquisitions, solely for the purpose of investment, by any
bank, banking association, trust company, investment company, or
insurance company, of (A) voting securities pursuant to a plan of
reorganization or dissolution; or (B) assets in the ordinary
course of its business; and
(12) such other acquisitions, transfers, or transactions, as
may be exempted under subsection (d)(2)(B) of this section.
(d) Commission rules
The Federal Trade Commission, with the concurrence of the
Assistant Attorney General and by rule in accordance with section
553 of title 5, consistent with the purposes of this section -
(1) shall require that the notification required under
subsection (a) of this section be in such form and contain such
documentary material and information relevant to a proposed
acquisition as is necessary and appropriate to enable the Federal
Trade Commission and the Assistant Attorney General to determine
whether such acquisition may, if consummated, violate the
antitrust laws; and
(2) may -
(A) define the terms used in this section;
(B) exempt, from the requirements of this section, classes of
persons, acquisitions, transfers, or transactions which are not
likely to violate the antitrust laws; and
(C) prescribe such other rules as may be necessary and
appropriate to carry out the purposes of this section.
(e) Additional information; waiting period extensions
(1)(A) The Federal Trade Commission or the Assistant Attorney
General may, prior to the expiration of the 30-day waiting period
(or in the case of a cash tender offer, the 15-day waiting period)
specified in subsection (b)(1) of this section, require the
submission of additional information or documentary material
relevant to the proposed acquisition, from a person required to
file notification with respect to such acquisition under subsection
(a) of this section prior to the expiration of the waiting period
specified in subsection (b)(1) of this section, or from any
officer, director, partner, agent, or employee of such person.
(B)(i) The Assistant Attorney General and the Federal Trade
Commission shall each designate a senior official who does not have
direct responsibility for the review of any enforcement
recommendation under this section concerning the transaction at
issue, to hear any petition filed by such person to determine -
(I) whether the request for additional information or
documentary material is unreasonably cumulative, unduly
burdensome, or duplicative; or
(II) whether the request for additional information or
documentary material has been substantially complied with by the
petitioning person.
(ii) Internal review procedures for petitions filed pursuant to
clause (i) shall include reasonable deadlines for expedited review
of such petitions, after reasonable negotiations with investigative
staff, in order to avoid undue delay of the merger review process.
(iii) Not later than 90 days after December 21, 2000, the
Assistant Attorney General and the Federal Trade Commission shall
conduct an internal review and implement reforms of the merger
review process in order to eliminate unnecessary burden, remove
costly duplication, and eliminate undue delay, in order to achieve
a more effective and more efficient merger review process.
(iv) Not later than 120 days after December 21, 2000, the
Assistant Attorney General and the Federal Trade Commission shall
issue or amend their respective industry guidance, regulations,
operating manuals and relevant policy documents, to the extent
appropriate, to implement each reform in this subparagraph.
(v) Not later than 180 days after December 21, 2000, the
Assistant Attorney General and the Federal Trade Commission shall
each report to Congress -
(I) which reforms each agency has adopted under this
subparagraph;
(II) which steps each has taken to implement such internal
reforms; and
(III) the effects of such reforms.
(2) The Federal Trade Commission or the Assistant Attorney
General, in its or his discretion, may extend the 30-day waiting
period (or in the case of a cash tender offer, the 15-day waiting
period) specified in subsection (b)(1) of this section for an
additional period of not more than 30 days (or in the case of a
cash tender offer, 10 days) after the date on which the Federal
Trade Commission or the Assistant Attorney General, as the case may
be, receives from any person to whom a request is made under
paragraph (1), or in the case of tender offers, the acquiring
person, (A) all the information and documentary material required
to be submitted pursuant to such a request, or (B) if such request
is not fully complied with, the information and documentary
material submitted and a statement of the reasons for such
noncompliance. Such additional period may be further extended only
by the United States district court, upon an application by the
Federal Trade Commission or the Assistant Attorney General pursuant
to subsection (g)(2) of this section.
(f) Preliminary injunctions; hearings
If a proceeding is instituted or an action is filed by the
Federal Trade Commission, alleging that a proposed acquisition
violates section 18 of this title, or section 45 of this title, or
an action is filed by the United States, alleging that a proposed
acquisition violates such section 18 of this title, or section 1 or
2 of this title, and the Federal Trade Commission or the Assistant
Attorney General (1) files a motion for a preliminary injunction
against consummation of such acquisition pendente lite, and (2)
certifies the United States district court for the judicial
district within which the respondent resides or carries on
business, or in which the action is brought, that it or he believes
that the public interest requires relief pendente lite pursuant to
this subsection, then upon the filing of such motion and
certification, the chief judge of such district court shall
immediately notify the chief judge of the United States court of
appeals for the circuit in which such district court is located,
who shall designate a United States district judge to whom such
action shall be assigned for all purposes.
(g) Civil penalty; compliance; power of court
(1) Any person, or any officer, director, or partner thereof, who
fails to comply with any provision of this section shall be liable
to the United States for a civil penalty of not more than $10,000
for each day during which such person is in violation of this
section. Such penalty may be recovered in a civil action brought by
the United States.
(2) If any person, or any officer, director, partner, agent, or
employee thereof, fails substantially to comply with the
notification requirement under subsection (a) of this section or
any request for the submission of additional information or
documentary material under subsection (e)(1) of this section within
the waiting period specified in subsection (b)(1) of this section
and as may be extended under subsection (e)(2) of this section, the
United States district court -
(A) may order compliance;
(B) shall extend the waiting period specified in subsection
(b)(1) of this section and as may have been extended under
subsection (e)(2) of this section until there has been
substantial compliance, except that, in the case of a tender
offer, the court may not extend such waiting period on the basis
of a failure, by the person whose stock is sought to be acquired,
to comply substantially with such notification requirement or any
such request; and
(C) may grant such other equitable relief as the court in its
discretion determines necessary or appropriate,
upon application of the Federal Trade Commission or the Assistant
Attorney General.
(h) Disclosure exemption
Any information or documentary material filed with the Assistant
Attorney General or the Federal Trade Commission pursuant to this
section shall be exempt from disclosure under section 552 of title
5, and no such information or documentary material may be made
public, except as may be relevant to any administrative or judicial
action or proceeding. Nothing in this section is intended to
prevent disclosure to either body of Congress or to any duly
authorized committee or subcommittee of the Congress.
(i) Construction with other laws
(1) Any action taken by the Federal Trade Commission or the
Assistant Attorney General or any failure of the Federal Trade
Commission or the Assistant Attorney General to take any action
under this section shall not bar any proceeding or any action with
respect to such acquisition at any time under any other section of
this Act or any other provision of law.
(2) Nothing contained in this section shall limit the authority
of the Assistant Attorney General or the Federal Trade Commission
to secure at any time from any person documentary material, oral
testimony, or other information under the Antitrust Civil Process
Act [15 U.S.C. 1311 et seq.], the Federal Trade Commission Act [15
U.S.C. 41 et seq.], or any other provision of law.
(j) Omitted
(k) Extensions of time
If the end of any period of time provided in this section falls
on a Saturday, Sunday, or legal public holiday (as defined in
section 6103(a) of title 5), then such period shall be extended to
the end of the next day that is not a Saturday, Sunday, or legal
public holiday.
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