Describe the business operation(s) of all entities within the acquiring person. Currently, Item 8 provides separate thresholds for acquisitions of control of entities and acquisitions of assets. Contract changes or terminations must be registered within six days. Along with the proposed definitions discussed above, the Commission proposes changes to the Instructions to implement this mandate from Congress. For each such entity, list the name(s) by which the entity does or has within the last 3 years done business, whether the listed entity is controlled by the filing person or an associate of the filing person, the overlapping NAICS code(s), NAICS description(s), and provide the appropriate Geographic Market Information, based upon the NAICS code. https://www.ers.usda.gov/data-products/commuting-zones-and-labor-market-areas/. 4. Federal Register The Commission proposes creating a NAICS section within the proposed Instructions. The fact that the person within which the issuer or unincorporated entity is included may be required to file notification under the Act. This is potentially true of both the acquiring person and the acquired entity. As explained below, specific information related to entities controlled by the filing person is critical to the Agencies' initial antitrust review as it serves as the primary tool for identifying horizonal overlaps between the parties to the transaction and their controlled entities, especially for transactions involving a UPE with complex corporate structures and multiple entities under its control. Information about board observers can also be relevant to the Agencies' analysis of the proposed transaction. As discussed elsewhere, NAICS code reporting can result in underreporting of horizontal overlaps, and not every HSR Filing contains 4(c) documents that could potentially reveal overlaps not identified by NAICS code reporting. Moreover, given the difficulties in determining the value of small or nascent companies, the Commission believes it would be less burdensome for filers to report all acquisitions rather than expend additional time in assessing their value in terms of net sales or assets. 18a(b)(1)(B); 11 U.S.C. For each such overlapping product or service, the filing person would provide sales, customer information (including contacts), a description of any licensing arrangements, and any non-compete or non-solicitation agreements applicable to employees or business units related to the product or service. The proposed Periodic Plans and Reports section would require filing persons to submit certain high-level strategic business documents that were not created in contemplation of the transaction but still contain information relevant to the antitrust analysis. Start Printed Page 42193 Similarly, the Agencies have developed a protocol for coordination in merger investigations with State Attorneys General. However, the notice period may be reduced to less than one month . better and aid in comparing the online edition to the print edition. The revisions and additions read as follows: (a)(1) The notification required by the act shall be filed by the preacquisition ultimate parent entity, or by any entity included within the person authorized by such preacquisition ultimate parent entity to file notification on its behalf. 134 Q.J. The Commission recognizes, however, that the definition of a foreign entity of concern in the IIJ Act does not explicitly include foreign governments or government agencies. This item should only be completed by the acquiring person when voting securities are being acquired. In that case, the employee would be due severance for 33 days salary per year of service, with a cap of 24 months pay. scenario arises most commonly when a seller will receive voting securities of the buyer as consideration for the sale of the target. 30. 17. Identification of limited partners can provide valuable information about co-investors and lead to the identification of potentially problematic overlapping investments resulting from the transaction that could violate Section 7. S67 (2014). These statutory deadlines for conducting an initial review are extraordinarily short, and the Agencies must work quickly to determine whether to take steps to prevent the consummation of potentially anticompetitive transactions. The sales (in units and dollars and any other appropriate measure) for each of the past two fiscal years, separately to (1) the other party (acquiring person or acquired entity as appropriate) and (2) any other business that, to the filing person's knowledge or belief, uses its product, service, or asset to compete with the other party's products or services, or as an input for a product or service that competes or is intended to compete with the other party's products or services. [51] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2017.0054. Section 801.1(r)(1) Foreign Entity or Government of Concern, A. 65. These can be useful See also Indicate whether the transaction that is the subject of this filing has related filings because the transaction: Provide additional details regarding the related transaction(s), such as party names and transaction numbers. Indicate the five largest 6-digit SOC codes in which both parties (the acquiring person and the acquired entity) employ workers. Concurring Statement of Commissioner Slaughter and Chair Khan regarding Although Section 8 does not technically apply to unincorporated entities, information sharing and coordination can still raise concerns under Section 1 of the Sherman Act. In others, the dates of the documents suggest that otherwise responsive drafts were not finalized or shared with officers or directors until after making an HSR Filing. below, the Commission is proposing eliminating the use of 10-digit NAPCS codes. Note this percentage range could also be different ( Based on the Agencies' experience in reviewing and challenging illegal mergers, the proposals target the information that is most relevant and readily available to filing persons and would require it to be presented in a coherent and organized way that will facilitate quick antitrust review by the Agencies during the initial waiting period. For this reason, the Commission seeks comment on a potential alternate approach in which filing parties collect draft Transaction-Related Documents as part of preparing HSR filings but do not submit these documents until and unless agency staff reviewing the transaction requests the draft documents during the initial waiting period. All you need to do is focus on your business. To be clear, the Commission proposes requiring limited partnerships to identify all holders of 5% or more, but less than 50%, to harmonize the requirement for limited partnerships with the requirements for limited liability companies and corporations. There are numerous statutory laws that imply rights and obligations into the employment contract, and to this extent working relationships are regulated mainly by the applicable CBA. Section 803.2: Requiring Separate Forms for Acquiring and Acquired Persons, C. Section 803.5(b): Requiring Draft Agreements or Term Sheets, D. Section 803.8: Translation of Documents, E. Section 803.10: Commencement of Waiting Periods, F. Section 803.12: Information To Be Updated With Refiling, a. [26] In fact, based on documents submitted in response to Second Requests, it is the Agencies' experience that individuals other than officers and directors are often the authors or recipients of documents that are otherwise responsive to Item 4(c) of the Form but are not required to be submitted with the HSR Filing because they were not prepared by or for an officer or director. for temporary contracts of more than one year in duration. Access to the International product requires a subscription. The page you are about to view is currently not optimized for mobile devices. The privilege type (redacted or withheld); 3. Therefore, the Commission proposes that the acquired person only be required to identify minority holders of the acquired entity(s) that will continue to hold interest in the acquired entity(s) or will acquire interests in any entity within the acquiring person as a result of the transaction. Even after a company has established grounds for collective action, there are still proper steps that a business must follow according to Article 51 of the Workers Statue. 16 CFR 803 Appendix Notification and Report Form Instructions at page V. 46. If the claim of privilege is based on advice from inside and/or outside counsel, the name of the inside and/or outside counsel providing the advice (and the law firm, if applicable) must be provided. [67] Currently, page one of the Form asks filing persons to voluntarily identify other jurisdictions where the transaction will trigger premerger notification under the laws of that jurisdiction. Econ., 649702 (2021), All financial information should be expressed in millions of dollars rounded to the nearest hundred thousand. Most often, it comes in the form of a dismissal letter. While it remains important for the Agencies to receive legal entity names, these names (08/28/2023) 59 FR 30545, 30547 (June 14, 1994). If parties submit documents in addition to what is required, such documents should be identified as Voluntary. This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. 5. Notify the employee of their termination in writing. 48 FR 34427, 34440 (July 29, 1983). Trade Comm'n, FTC Imposes Strict Limits on DaVita Inc.'s Future Mergers Following Proposed Acquisition of Utah Dialysis Clinics (Oct. 25, 2021), We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. Filing persons must also describe the business operation being acquired or what the assets being acquired comprise. Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. Some of the proposed changes are intended to reduce the burden of filing. The Commission proposes replacing the current Responses section with a new Responses section that would provide details on how to provide the information responsive to the proposed new questions. U.S. Dep't of Agric., ERS Commuting Zones and Labor Market Areas, Thus, the buyer and seller can each be an acquiring and an acquired person. Fourth, the Commission proposes treating asset transactions involving the prior acquisition of substantially all of the assets of a business in the same manner as prior acquisitions of voting securities or non-corporate interests. The Commission believes that filers have done some level of diligence to determine the business lines prior to investing in these entities, and should have some basis to identify overlaps. Information collected in this section would include information and documents currently collected in several parts of the Form: in Items 4(c) and 4(d), which require the production of certain documents created in conjunction with the evaluation of the transaction; Item 5(a), which requires the allocation of revenue from U.S. operations to industry and product codes; Item 6(c), which identifies certain minority-held entities of the filer; Item 7, which provides information about industries in which the acquiring person and acquired entity both participate; and Item 8, which requires the identification of certain prior acquisitions made by the acquiring person. Non-wage contributions such as health benefits and payments made to social security are not included. These proposals would also provide a more reliable and robust set of information to determine when the transaction does not warrant an in-depth investigation, which often requires a substantial investment of time and resources for both the investigating agency and the merging parties. In the Commission's experience, in those cases, responses to current Item 4(c) often do not contain documents with sufficient information about the filing person's analysis of the competitive implications of the transaction to enable the Agencies to identify potentially problematic transactions. For limited partnerships, the general partner(s), regardless of percentage held, should also be listed. All documents should be logged in an Excel File. [40] Log in. Additionally, list all individuals who will or are likely to serve as an officer, director, or board observer of an entity within the acquiring person as a result of or as contemplated by the transaction. 129 J. of Pol. Additionally, based on the knowledge or belief of the acquiring person, for each associate (see 801.1(d)(2)) of the acquiring person holding: 1. What are the risks of terminating employment in Spain, and how do I mitigate them? Since 2001, and certainly since 1994, merger enforcement by other competition authorities has become more robust as more jurisdictions have adopted competition laws that impose mandatory or voluntary premerger notification requirements. Documents responsive to this item are limited to those produced within one year before the date of filing. Studies, Surveys, Analyses, and Reports, ii. The Commission also proposes the addition of language in the Instructions that would serve to remind filers that there are criminal penalties under other federal statutes that prohibit various deceptive practices aimed at frustrating or impeding the legitimate functions of government departments or agencies. Hire and pay your global team in one single system. https://www.ftc.gov Section 8 bars interlocks that arise through rights to appoint board members to a competitor[36] Once employees have been continuously employed for one year, they are entitled to 30 calendar days' paid holiday every year. 81. The Commission recognizes that, in total, these proposed changes would be significant and impose additional burden on some filing parties. E.I. Certain proposed changes would require the acquiring person to collect and report information that the Commission believes is held in the acquiring person's ordinary course of business records. Learn about the notice period in Spain thanks to Horizons up-to-date guide. The Commission proposes creating a Supply Relationships Narrative section that would require each filing person to provide information about existing or potential vertical, or supply, relationships between the filing persons. See 801.12. Quite often, Spanish courts have held that a reasonable termination notice is equivalent to at least one month per year of term of the contract, following the same notice period as established for . For each 6-digit NAICS code within the industry sector, subsector, or code listed below, list the states or, if desired, portions thereof in which the person filing notification conducts such operations. 1. When reporting information by 6-digit Standard Occupational Classification (SOC) code, refer to the 2018 SOC System, available at 30840005). Id. As noted above, Item 3(a) of the Form requires filing parties to briefly describe the transaction, including whether assets, voting securities, or non-corporate interests (or some combination) are to be acquired. For instance, some credit arrangements permit the creditor to exercise rights and influence similar to those of equity holders. 3. In contrast, when filers choose to submit two separate Forms for such transactions, these filings provide all the required information and in a much clearer format. Employees not in their probation period must give their employer a minimum of 15 calendar days of notice upon resignation, with up to three months of notice being given by some employees, in practice. Is unused leave paid out at the time of termination? Therefore, the Commission believes these documents are essential to the Agencies' initial antitrust assessment of the transaction. The proposed UPE Details section within the proposed Instructions would contain most of the information currently required in Item 1 of the Form. The acquiring person may rely on its regularly prepared financials that list its investments, and those of its associates that list their investments, provided the financials are no more than three months old. As filing persons have become more complex, an alphabetically or geographically organized list of the controlled entities, which is currently permitted by Item 6(a) of the Form, often does not provide the Agencies with a sufficient overview of the scope of the businesses that the acquiring person and acquired entity(s) control. Provide all plans and reports (including semi-annual or quarterly) that were provided to the Board of Directors of the acquiring or acquired entity (as appropriate) and any entity that it controls or is controlled by that analyze market shares, competition, competitors, or markets pertaining to any product or service also produced, sold, or known to be under development by the other party (acquiring person or acquired entity as appropriate). Neither of these is reliable as a substitute for information provided by the parties themselves and certified as a complete response. "As a seed-stage, London-based startup, we were initially hesitant to expand internationally due to the administrative workload involved. This item is voluntary. Voluntary Waivers for International Competition Authorities and State Attorneys General, Communications by Outside Parties to Commissioners and Their Advisors, Increased Time Collecting Data for and Preparing an HSR Filing, [INSERT GENERAL INSTRUCTIONS AND INFORMATION], Antitrust Improvements Act Notification for Certain Mergers and Acquisitions, Economic Research Service's Commuting Zones, North American Industry Classification System (NAICS) Data, Entities Within the Acquiring Person and Acquired Entity, Minority Shareholders and Other Non-Controlling Entities, Other Types of Interest Holders That May Exert Influence, Documents Prepared by or for Officers, Directors, or Supervisory Deal Team Lead(s), Organizational Chart of Authors and Recipients, Geographic Market Information for Each Overlapping Employee Classification, NAICS Codes Describing U.S. Operations With Estimates of Revenue, Minority Holdings of Acquiring Person and Its Associates, Subsidies From Foreign Entities or Governments of Concern, Identification of Communications and Messaging Systems, Transactions Subject to International Antitrust Notification, HSR Confidentiality Waiver for International Competition Authorities (VOLUNTARY), HSR Confidentiality Waiver for State Attorneys General (VOLUNTARY), https://www.federalregister.gov/d/2023-13511, MODS: Government Publishing Office metadata, https://www.ers.usda.gov/data-products/commuting-zones-and-labor-market-areas/, https://www.bls.gov/soc/2018/#classification, https://www.trade.gov/case-announcements-archives, https://legacy.trade.gov/enforcement/operations/scope/index.asp, https://www.ftc.gov/site-information/privacy-policy. 1998), reginfo.gov If the Updated HSR Filing is received within two business days of withdrawal, no new fee is required, but filers currently must provide a new affidavit and certification and update current Item 4 of the Form to provide the Agencies with more recent information that is likely relevant to the continued review. For example, co-investors often do not invest at the UPE or acquiring entity level but may hold a 5% or greater interest in an entity that is in between the UPE and the acquiring entity in the ownership structure. Use the PDF linked in the document sidebar for the official electronic format. Despite the added burden for filing persons, on balance, the Commission believes that the benefit to the Agencies' merger review would be significant and would help address information asymmetries between Agency staff and the filing persons in the initial waiting period. From 6 July 2022, the notice periods a landlord must provide a tenant when ending a tenancy have increased. Narrative Describing Transaction Rationale, Expansion of Transaction Agreements to be Produced. This can be sent by email or via standard mail and you must receive receipt confirmation. If you feel its too much to handle, then you can consider hiring through an EOR, which will ensure compliance with local employment laws. [22] Recognizing the burden that providing the street-level address for each location of an entity can require, the Commission differentiates between (1) NAICS industry codes that either do not tend to involve small local or regional markets or involve local markets but nonetheless can adequately be reviewed if the parties specify only the state in which revenue is derived, and (2) those which do tend to involve local markets for which knowing the areas served by each filing person is important to identify locations where