Second Requests and How They Reshape a Deal Timetable
A second request converts a thirty-day pause into an open-ended investigation controlled largely by the party being investigated, because the clock does not restart until the parties themselves certify that they have finished producing.
The rule in short
Where an agency needs more than the initial waiting period, it issues a request for additional information and documentary material before that period expires. The waiting period is then extended until thirty days after both parties substantially comply, or ten days in a cash tender offer. Because the parties control the pace of production, the practical timetable is set by negotiated timing agreements rather than by the statute.
Most reportable transactions clear without incident. A small fraction attract a request for additional information and documentary material, and those transactions enter a different world: months of document collection, custodial interviews, economic data production and a certification that, once made, starts a short clock on a decision that has been building for the better part of a year.
The instrument and its timing
The request is authorized by the same section that creates the notification obligation. It must issue before the initial waiting period expires; an agency that lets the period run has lost the ability to extend it for that filing. Once issued, the waiting period does not expire until thirty days after both parties have substantially complied, or ten days in the case of a cash tender offer or a bankruptcy sale acquisition.
The document itself is long and largely standardized. Both agencies publish a model. It calls for documents from a specified set of custodians over a specified period, transactional and strategic materials, detailed narrative interrogatory responses about products, customers, pricing and capacity, and structured data — transaction-level sales records, bid and win-loss files, and cost information. The data specifications are usually more burdensome than the documents, because they require the parties to extract and reconcile records from systems built for accounting rather than for economic analysis.
Which agency asks, and how it is decided
The Federal Trade Commission and the Antitrust Division both review mergers, and one of them takes each matter. Clearance between them is resolved internally, usually on the basis of which agency has recent experience in the industry, and it happens in the first days after filing. Only the agency that receives clearance may issue a second request.
The decision to issue follows an initial investigation in which staff review the filing, read the strategic documents submitted with it, and often speak with customers and rivals. Where that work suggests a plausible theory of harm — usually unilateral effects between close substitutes, coordinated effects in a concentrated market, or foreclosure in a vertical structure — the request issues. The theory drives the specifications, so the shape of the request tells the parties a good deal about what market the agency thinks it is looking at.
Complying, and certifying that you have
Substantial compliance is not perfect compliance. It means a good faith production of what the request calls for, after negotiation of its scope. Almost every second request is narrowed by agreement: the custodian list is cut, date ranges are shortened, search terms are tested and refined, and some specifications are withdrawn in exchange for others. Those negotiations are conducted with the deputy responsible for the matter and are recorded in correspondence that later defines what compliance means.
Production carries the ordinary burdens of large-scale electronic discovery, including the preparation of a privilege log for withheld material and the difficulty of distinguishing legal advice from the business advice lawyers give alongside it — a distinction that turns on the narrower scope of privilege compared with the duty of confidentiality. Compliance is then certified by an officer of the filing person, on oath, and the thirty-day clock begins.
Because the clock runs from the party's own certification, a filer can extend the investigation indefinitely by producing slowly. Deal counsel rarely do. A merger agreement contains an outside date, financing commitments expire, and the seller's business deteriorates while the review runs. In most matters the party under investigation is pushing to certify and the agency is pushing to slow certification, which is the opposite of the intuition.
Timing agreements and what they trade
The statutory thirty days after certification is not enough time for an agency to complete depositions, finish an economic analysis, brief a recommendation and prepare a case. Rather than force a decision on that schedule, both agencies negotiate timing agreements. The parties agree to give advance notice before certifying substantial compliance, to give further notice before closing, and not to consummate for a defined number of days after certification. The agency agrees to a continuing dialogue, to identify its theories, and to make senior staff available for meetings before any recommendation is made.
In exchange for those commitments the parties usually obtain material limits on the production: a capped number of custodians, agreed search protocols, and relief from some data specifications. The bargain is straightforward. The agency buys time and the parties buy scope.
Devices that move the closing date
| Device | Effect on the clock | Who controls it | Cost |
|---|---|---|---|
| Expiration of the initial period | Parties may close on day thirty-one | Neither; automatic | None |
| Withdrawal and refiling | A fresh thirty-day period begins | The filing party | No new fee if refiled promptly |
| Second request | Suspended until thirty days after compliance | Agency issues; party paces compliance | Production and counsel expense |
| Timing agreement | No statutory effect; contractual delay after certification | Negotiated | Weeks or months of additional delay |
| Suit to enjoin | Closing halted pending decision | The court | Full litigation |
Withdrawal and refiling deserves a note of its own. The rules permit a filing person to withdraw notification and refile it, restarting the initial period without paying a second fee where the refiling follows promptly and the transaction has not materially changed. It is used to buy the agency two more weeks of review and thereby avoid a second request that neither side wants, and it is used to reset the clock after a deal's terms are amended.
Closure, remedy or litigation
Three endings are possible. Staff may recommend closing the investigation, which happens more often than the volume of production suggests. The parties may negotiate a remedy — most commonly divestiture of an overlapping business to an approved buyer, embodied in a consent decree filed with the court or an administrative order. Or the agency may sue: the Antitrust Division in district court, the Commission by seeking a preliminary injunction while an administrative proceeding goes forward.
A challenged deal is litigated on the substantive standard rather than on anything in the filing package, which means the trial is about the same questions the parties argued during the investigation. That is also why the filing regime and the substantive law must be kept separate in analysis: notification and the waiting period determine when a challenge may be brought conveniently, while the merits turn on effects. Where the theory is foreclosure rather than concentration, the case borrows from the law of exclusive arrangements and tied sales, and where a dominant firm is acquiring a nascent rival it borrows from the law of exclusionary conduct.
Points to carry away
- A second request must issue before the initial waiting period expires or the opportunity is lost.
- The extended period runs from substantial compliance, which the parties certify under oath.
- Substantial compliance is judged by the agency, and a dispute over it can be taken to court.
- Timing agreements are voluntary contracts that trade production limits for advance notice of closing.
- Withdrawing and refiling restarts the initial thirty days without a new filing fee.
- An investigation ends in closure, a negotiated remedy, or a suit to enjoin the transaction.
Questions readers ask
Who decides whether a party has substantially complied?
The agency does, in the first instance, and it is not bound by the party's certification. If the reviewing staff conclude that custodians were omitted, that search terms were too narrow, or that data productions are incomplete, they will say so and treat the clock as not running. The party's remedy is to negotiate or to seek a ruling in district court, but litigation over compliance is rare because it consumes more time than it saves and signals to the agency that the production was in fact deficient.
Does a timing agreement extend the statutory waiting period?
No, and the agencies say so expressly. The waiting period expires when the statute says it expires. A timing agreement is a contract in which the parties promise not to close for a further defined period after certification and to give advance notice before certifying and before closing. If the parties breach it the transaction is not unlawful for that reason, but the agency loses the time it bargained for and will ordinarily respond by moving immediately for injunctive relief.
What happens to a deal that is investigated and then abandoned?
Abandonment ends the merger review, because there is no longer a transaction to enjoin, and the agency closes its file. Two consequences survive. The documents produced remain with the agency and may inform later work in the same industry, including review of a subsequent transaction by either party. And the merger agreement's own allocation of risk governs what the parties owe each other, which is why break fees and covenants about the level of effort required to obtain clearance are negotiated with the second request process in view.
Sources
- Cornell Legal Information Institute — 15 U.S.C. 18a, Premerger Notification and Waiting PeriodThe authority to request additional information and the extension that follows compliance.
- eCFR — 16 CFR Part 803, Transmittal RulesProcedure for filing, for withdrawing and refiling, and for certifying compliance.
- Federal Trade Commission — Merger ReviewThe agency's description of the investigation stages and its model process documents.
- Federal Trade Commission — Premerger Notification and the Merger Review ProcessHow a filing moves from initial review to a second request and to a decision.
- Cornell Legal Information Institute — 15 U.S.C. 53, Injunctions and Temporary ReliefThe Commission's authority to seek a preliminary injunction pending administrative proceedings.
- Cornell Legal Information Institute — 15 U.S.C. 25, Restraining Violations of the Antitrust LawsDistrict court jurisdiction over suits brought by the Department of Justice to block a transaction.
Justice Partners Journal is a publication, not a law firm. This article states general rules and cites its sources; it is not advice about any particular case, and the law differs by state and changes over time.
