was required to divest the subsidiary which was actually taking over the independent company, the parent company would not object to divestiture of the independent food supplier on terms set by the Commission or other court or agency.

[33 F.R. 2888, Feb. 13, 1968]

§ 15.173 Premerger clearance denied: Lack of competitive information.

(a) The Commission issued an advisory opinion on October 29, 1965, in which a request for premerger clearance from liability under section 7, amended Clayton Act, was denied for lack of competitive information concerning competition in the line of commerce involved.

(b) A leading manufacturer of dispensing machines sought approval of its proposed purchase of a smaller, family held manufacturer of dispensing machines which were complementary to the product line of the acquiring company.

(c) The Commission declined to render an opinion because of (1) the paucity of competitive information concerning competition in the line of commerce with which the acquired company's machine was identified, and (2) the short time period available between the date of the request and the closing date agreed upon between the parties. This short time precluded a more complete investigation and analysis.

[33 F.R. 2889, Feb. 13, 1968]

§ 15.174

Premerger clearance denied: Vertical merger would raise questions.

(a) The Commission issued an advisory opinion September 8, 1966, in which a request for premerger clearance from liability under section 7, amended Clayton Act, was denied because the competitive implications of the acquisition would raise economic questions resolvable only by investigation.

(b) A leading construction material producer applied for clearance of its proposed acquisition of a diversified company having a large share of a regional market in the sale of raw materials such as sand, gravel, and stone, which were complementary to its principal product line. The requesting party offered to dispose of certain producing plants now operated by the company, and to continue appropriate leases of other such plants as the company owned.

(c) The Commission advised the requesting party that the competitive im

plications of the integration of construction material distributors with sources of raw materials were such that an investigation to assess the economic effects of the acquisition, if it was consummated, would be necessary.

[33 F.R. 2889, Feb. 13, 1968]

§ 15.175 Interpretation of request for premerger clearance: Declining industry.

(a) The Commission issued an opinion October 8, 1965, in connection with a request for advice by two respondents as to whether a proposed merger, if consummated, would be in violation of an outstanding order prohibiting them from, among other matters, uniting facilities so as to eliminate competition.

(b) One respondent, a small company in the coin operated machine business, desiring to be acquired by the other, a larger company in the same industry, applied for clearance of the proposed acquisition under Commission established procedures. It was reported that the smaller respondent was in financial difficulties to the point where it was approaching failure. Further reasons advanced to support the proposed merger were that demand for the product was on the decline, the industry easy to enter, and reasonable efforts to locate another purchaser had been unsuccessful.

(c) On the basis of available information, the Commission advised that if the smaller respondent sold its business to any company, the Commission did not intend to initiate proceedings with regard to such sale.

[33 F.R. 2889, Feb. 13, 1968]

§ 15.176 Premerger clearance: De minimis competitive effects.

(a) The Commission issued an advisory opinion on November 29, 1966, in which a request for premerger clearance from liability under section 7, amended Clayton Act, was approved permitting acquisition of a company in financial distress.

(b) A dairy products processing company in financial difficulty desiring to be acquired by a larger company in the same field applied for clearance of the proposed acquisition. The companies competed to a limited extent: however, the applicant had losses for a number of years, could not obtain long-term financing and had made numerous unsuccessful attempts to see to others.

(c) The requesting party was advised that, relying on his representations as to the hopeless financial condition and unsuccessful efforts to sell, the Commission would not challenge the proposed acquisition if it were consummated. [33 F.R. 2889, Feb. 13, 1968]

§ 15.177 Compliance interpretation of request for premerger clearance: Imminent insolvency.

(a) The Commission issued an opinion February 14, 1964, in connection with a request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding order prohibiting the acquiring company from making certain acquisitions.

(b) A small company manufacturing food products applied for clearance of its acquisition by a larger producer engaged in operations in the same product line. The larger producer was subject to a Commission order prohibiting certain acquisitions for a designated period of time without prior Commission approval.

(c) Both producers competed in the same general trading area. It was presented that the smaller company was in imminent danger of insolvency and that it had exhausted every possibility of locating

success.

another purchaser without

(d) On the basis of available information, but primarily because of the equities affecting the smaller company's position in the industry, the Commission gave its approval to the proposed acquisition.

[33 F.R. 2890, Feb. 13, 1968]

§ 15.178 Compliance interpretation_of request for premerger clearance: Denied, other purchasers available.

(a) The Commission issued an opinion April 2, 1964, in connection with a request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding order prohibiting the acquiring company from making certain acquisitions.

(b) A large company in the food products field applied for clearance of its proposed acquisition of a smaller company engaged in operations in the same product line. The larger company was subject to a Commission order prohibiting certain acquisitions for a designated period of time without prior Commission approval.

(c) Both companies were in substantial competition in the same general trading

area. It was determined that other prospective purchasers were available and that the smaller company was of considerable size when compared with other regional producers.

(d) The Commission advised that the proposed merger could not be approved under the circumstances.

[33 F.R. 2890, Feb. 13, 1968]

§ 15.179 Compliance interpretation of request for premerger clearance: Imminent bankruptcy.

(a) The Commission issued an opinion October 28, 1964, in connection with a request for advice from a small company as to whether its proposal to merge with any other company in the same field would, if consummated, be in violation of section 7, amended Clayton Act.

(b) A small food products manufacturer applied for advice from the Commission regarding the possibility of selling out to any other company operating in the same field, particularly to a large processor in the same products line. The larger producer was subject to a Commission order prohibiting such acquisitions for a designated period of time without prior Commission approval.

(c) It was presented that the requesting company had made reasonable but unsuccessful attempts to locate a purchaser other than the larger company, and moreover was on the verge of bankruptcy.

(d) On the basis of available information, but primarily because of the equities affecting the requesting company's position in the industry, the Commission advised that an acquisition by another producer in the same field would not be in violation of section 7, amended Clayton Act, and in the event a sale is made to a company which is under Commission order requiring approval of such acquisition, and approval would be granted.

(e) In clearing the proposed sale the Commission pointed out that the approval might be reconsidered, revoked or rescinded if it subsequently appeared the facts submitted were inaccurate, incomplete or that they had changed at the time a sale was made. [33 F.R. 2890, Feb. 13, 1968]

§ 15.180 Compliance interpretation of request for premerger clearance: Imminent insolvency.

(a) The Commission issued an opinion September 24, 1965, in connection with a

request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding Commission order prohibiting the acquiring company from making certain acquisitions for a designated period of time without prior Commission approval.

(b) A small food products manufacturer applied for clearance of its proposed acquisition by a larger company under Commission order and which was much more extensively engaged in the same product line. The requesting company was experiencing a decline in annual profits to the point of insolvency. It was reported that refinancing was not available and the smaller company was not, for a number of reasons, a viable concern in the context of the particular market. Exhaustive efforts to locate another purchaser had been unsuccessful.

(c) On the basis of available information the Commission gave its approval to the proposed acquisition.

[33 F.R. 2890, Feb. 13, 1968]

§ 15.181 Compliance interpretation of requests for premerger clearance: De minimis competitive effects; one request denied.

(a) The Commission issued opinions on February 9, 1966 and January 26, 1967, in connection with requests for advice as to whether several proposed mergers, if consummated, would be in violation of an outstanding Commission order prohibiting future acquisitions by respondent for a designated period of time without prior Commission approval.

(b) A large automatic machine company under Commission order sought approval for the proposed acquisition of two smaller, local companies engaged in the same line of business. In one metropolitan area respondent and the first smaller company were in competition, and in the other trading area respondent and the second smaller company did not compete to any significant degree. In the first area there were a substantial number of local and national competitors involved, and in the other area a substantial number of local competitors and one national competitor were involved.

(c) In these two instances the Commission approved the proposed acquisitions.

(d) In a third request for advice involving a different trading area, the respondent sought clearance for the proposed acquisition of a smaller, local

company engaged in the same line of business in direct competition with the larger company. There was a concentration in the line of commerce involved. The Commission denied the request for clearance because it was incompatible with the objectives of the order prohibiting such acquisitions.

[33 F.R. 2890, Feb. 13, 1968]

§ 15.182 Compliance interpretation of request for premerger clearance: Liquidation probable.

(a) The Commission issued an opinion May 24, 1966, in connection with a request for advice as to whether a proposed acquisition, if consummated, would be in violation of an outstanding order prohibiting respondent from making certain acquisitions for a designated period of time without prior Commission approval.

(b) A large manufacturer of food products sought clearance of its proposal to acquire a smaller manufacturer engaged in the same general line of commerce. The requesting manufacturer was, and is now, subject to a Commission order prohibiting, among other things, the making of certain acquisitions for a designated period of time without prior Commission approval. The two manufacturers were not in competition in the same geographical trading area, but to a very limited extent the requesting manufacturer was a supplier to the smaller company.

(c) The smaller manufacturer had made reasonable but unsuccessful attempts to sell to others in the industry and in the circumstances liquidation apparently was the only alternative to the proposed sale.

(d) The Commission advised that, in reliance on the information submitted by the parties, if the proposed acquisition was made, the Commission would not proceed against the acquiring company. [33 F.R. 2891, Feb. 13, 1968]

§ 15.183 Compliance interpretation of request for premerger clearance: Denied, competitive considerations. (a) The Commission issued an opinion July 20, 1966, in connection with a request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding order prohibiting the acquiring company from making certain acquisitions.

(b) A large manufacturer of industrial products sought clearance for its pro

posed acquisition of a smaller company in the same as well as in a complementary product line. The requesting manufacturer was, and is now, subject to a Commission order prohibiting, among other things, the making of certain acquisitions for a designated period of time without prior Commission approval.

(c) Both manufacturers were competitors and the smaller was quite capable of growing and developing in the industry. Further, no efforts had been made to locate other possible purchasers.

(d) The Commission advised that approval for the proposed acquisition would not be in the public interest because it would entail the acquisition of a competitor and further increase concentration in the industry.

[33 F.R. 2891, Feb. 13, 1968]

§ 15.184 Compliance interpretation of request for premerger clearance: Bankruptcy imminent.

(a) The Commission issued an opinion September 1, 1966, in connection with a request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding order prohibiting the acquiring company from making certain acquisitions.

(b) A small processor of food products applied for clearance of its proposed acquisition by a larger processor engaged in operations in the same general product line. The larger processor was, and is now, subject to a Commission order prohibiting, among other matters, the making of certain acquisitions for a designated period of time without prior Commission approval.

(c) The requesting processor was on the verge of bankruptcy and had made reasonable but unsuccessful attempts to locate another purchaser within the industry.

(d) The Commission advised that, in reliance on the information and data supplied, it would approve the request for clearance of the proposed acquisition. [33 F.R. 2891, Feb. 13, 1968]

§ 15.185 Compliance interpretation of request for premerger clearance: De minimis competitive effect. (a) The Commission issued opinions September 29, 1966, and January 26, 1967, in connection with requests for advice from a small company as to whether a proposal to merge, if consummated, would violate an outstanding or

der prohibiting either purchasing company from making certain acquisitions.

(b) A small processor of food products which was tightly held, having declining profits, increasing expenses, a loss of key personnel, a plant too small to compete efficiently, and an ownermanager who was determined to sell, applied for clearance for its proposed acquisition by either of two larger processors in the same general line of commerce. Both of the larger processors were subject to a Commission order prohibiting certain acquisitions for a designated period of time without prior Commission approval.

(c) On the basis of supplied information, the Commission cleared the request for acquisition by either of the two larger processors. Subsequently, however, partial acquisition by a third processor was approved, as was a partial acquisition by one of the larger concerns. [33 F.R. 2891, Feb. 13, 1968]

§ 15.186 Compliance interpretation of request for premerger clearance: De minimis competitive effect.

(a) The Commission issued an opinion December 23, 1966, in connection with a request for advice as to whether a proposed merger, if consummated, would violate an outstanding order prohibiting the purchasing company from making certain acquisitions.

(b) The estate of a very small retailer of food products applied for clearance of its proposed acquisition by a larger processor engaged in operations in the same general product line. The larger company was, and is now, subject to a Commission order prohibiting certain acquisitions for a designated period of time without prior Commission approval. The retailer, a negligible factor in the industry and in the relevant geographical market, was not capable of development in the estate status.

(c) The Commission cleared the proposed acquisition.

[33 F.R. 2892, Feb. 13, 1968]

§ 15.187 Compliance interpretation of request for premerger clearance: Imminent insolvency.

(a) The Commission issued an opinion September 25, 1964, in connection with a request for advice as to whether a proposed merger, if consummated, would be in violation of an outstanding Commission order prohibiting the purchasing

company from making certain acquisitions.

(b) A large integrated company manufacturing commercial products applied for clearance to acquire a smaller company engaged in operations in the same product line in the Western States. The larger company was, and is now, subject to a Commission order prohibiting certain acquisitions for a designated period of time without prior Commission approval.

(c) Both manufacturers were in direct competition in the geographical trading area. However, each held a relatively small share of the market involved. It was represented that the small concern had exhausted all other possibilities of selling to another purchaser, save to one or more of the other integrated manufacturers in the industry. The seller, who was suffering personal hardships because of illness in his family, had to leave the business and the area which it served.

(d) On the basis of the information and data supplied, the Commission cleared the request for clearance of the proposed acquisition.

[33 F.R. 2892, Feb. 13, 1968]

§ 15.188 Premerger clearance denied: Merger of firms in same industry would raise questions.

(a) The Commission issued advisory opinions on September 27, 1962, March 28, 1963, and September 12, 1963, in which commutual requests for premerger clearance from liability under section 7, amended Clayton Act, by a small dairy in financial difficulty were denied as to acquisition by a larger company in the same industry, but were finally approved permitting acquisition by a diversified corporation in another industry.

(b) A small dairy in financial difficulty desiring to be acquired by a larger company in the same field applied for clearance of the proposed acquisition. The larger company, an integrated processor and distributor of dairy products, was the respondent in a complaint in litigation with the Commission.

(c) The applicant was advised the proposed acquisition would raise questions similar to those involved in the proceeding and that the pendency of the proceedings made it inappropriate to express any further views. Reconsideration was requested. In response, the Commission informed the applicant of the

decision in the Foremost Dairies case, Docket 6495 and again advised that the acquisition would raise serious questions under section 7 of the Clayton Act. Further, the Commission pointed out that it recognized the problems of small dairies and suggested further efforts to sell to a local or regional purchaser.

(d) Later, the small dairy requested consideration of its proposed acquisition by a large, diversified corporation in the food industry. The Commission advised it would contemplate no action if the transaction was consummated. The Commission added its advice should not be construed as affecting any position it had previously taken against the acquiring corporation nor as in any way prejudicing any pending or future action it might take against the acquiring corporation regarding other acquisitions.

[33 F.R. 2892, Feb. 13, 1968]

§ 15.189

Premerger clearance: Precarious financial condition.

(a) The Commission issued an advisory opinion on March 20, 1963, in which a request for premerger clearance from liability under section 7, amended Clayton Act, was approved permitting acquisition of a company on the verge of insolvency.

(b) A manufacturer of consumer goods desiring to be acquired by a larger producer in the same field requested clearance of the proposed acquisition. His company had suffered declining sales for a number of years and was in a precarious financial condition to the point of being on the verge of insolvency. Further, reasonable attempts to sell to others had been made but there was no other purchaser which could preserve the competitive force possessed by the requesting manufacturer.

(c) The requesting party was advised that if the sale were consummated, the Commission would contemplate no action based on this transaction alone. The Commission added that its decision was based on representations that the smaller firm was in such dire financial straits that it faced impending bankruptcy. Further, the Commission stated it was expressing no opinion regarding prior acquisitions or on restrictive practices, if any, by the purchaser or any other company which may have contributed to the requesting party's failing condition. [33 F.R. 2892, Feb. 13, 1968]