| Parties to mergers or acquisitions involving sales or assets of $200 million or meeting other threshold levels must report their planned merger or acquisition to the Department of Justice or the Federal Trade Commission and wait for 30 days (15 days in the case of a cash tender offer or a bankruptcy sale) following the report before completing the transaction. That waiting period allows the Department or the Commission time to review the transaction for its potential effect on competition before deciding what enforcement action, if any, will be taken.
If the agency reviewing the proposed transaction determines during the 30-day waiting period that more details are needed, it may issue a "Second Request" for information or documents. Issuance of a Second Request will extend the waiting period for an additional 30 days (or 10 days in the case of a cash tender offer or bankruptcy sale). The waiting period begins after the parties have fully complied with the Second Request.
A typical Second Request will include interrogatories and requests for production of documents and seek a wide range of detailed information about factors that may be relevant to determination of effects on competition of the proposed transaction. The Federal Trade Commission has a model Second Request on its website.
The detailed responses required by Second Requests may result as a practical matter in the passage of more time than the additional waiting period that begins following issuance of a Second Request. Thus, parties to the transaction may seek a narrowing of the Second Request by meeting with Department or Commission staff to narrow issues and to limit the scope of required responses to Second Request interrogatories or document requests. If the parties believe the Second Request is overbroad and discussions with Department or Commission staff are unsatisfactory, a formal review process within the Department and the Commission provides for consideration by a designated person within the agencies of issues regarding Second Request scope and compliance.
A "quick-look" alternative to a full response to a Second Request may be offered by staff at the Department or the Commission. Under this alternative, the staff will first determine critical issues raised by the proposed transaction and ask the parties to submit information required by the Second Request related to those critical issues. If the partial response to the Second Request resolves the critical issues, the staff may then end the waiting period without requiring a full response to the remainder of the Second Request.
Following the Second Request process, the Department or the Commission may decide that no enforcement action is necessary, that an order enjoining the transaction should be sought, or that a negotiated settlement of issues should be entered into and presented for public comment. Copyright 2010 LexisNexis, a division of Reed Elsevier Inc. |