What Is a Second Request?
A second request is a formal demand for additional documents and information issued by the Federal Trade Commission (FTC) or the Department of Justice (DOJ) Antitrust Division during the review of an M&A transaction filed under the Hart-Scott-Rodino Act. The issuance of a second request indicates that the reviewing agency has identified potential competitive concerns with the transaction and requires a deeper investigation before deciding whether to clear, condition, or challenge the deal.
Second requests are the most significant procedural event in US antitrust review. They transform what might have been a routine 30-day review into an investigation lasting 6-12 months, costing the parties $10-50 million or more in legal and compliance expenses, and fundamentally changing the deal timeline and risk profile.
How It Works
The Review Process
| Phase | Timeline | Activity |
|---|---|---|
| HSR filing | Day 0 | Both parties file HSR notification forms |
| Initial waiting period | 30 days (15 for cash tenders) | Agency reviews filing, determines if further investigation needed |
| Second request issued | Before waiting period expires | Agency sends formal demand for additional information |
| Compliance period | 3-9 months | Parties collect and produce documents, provide data and testimony |
| Substantial compliance | When production complete | New 30-day waiting period begins |
| Agency decision | Within 30 days of compliance | Clear, negotiate consent decree, or file lawsuit to block |
What a Second Request Demands
Second requests are extraordinarily broad and burdensome:
- Document production — all documents relating to the transaction, competition, pricing, customers, market share, and strategic planning (often millions of documents)
- Data submissions — transactional data, customer lists, pricing data, and financial information
- Interrogatory responses — detailed written answers to questions about the parties’ businesses
- Depositions — testimony from executives, sales personnel, and other witnesses
Cost and Burden
According to analysis by the American Bar Association’s Antitrust Section, the average cost of complying with a second request ranges from $10-50 million per party, including:
- External legal counsel ($5-25 million)
- Document review and e-discovery ($3-15 million)
- Economic consultants and experts ($1-5 million)
- Internal management time and business disruption (unquantified but substantial)
Frequency
Second requests are issued in only 2-4% of HSR filings, but their significance far exceeds their frequency. For transactions that receive a second request:
- Approximately 50-60% ultimately receive clearance (with or without divestitures)
- Approximately 20-30% are abandoned by the parties
- Approximately 10-20% are challenged in court by the agency
Strategic Implications
For the Buyer
- Budget impact — second request costs must be budgeted from the outset for deals with material competitive overlap
- Timeline — the outside date must accommodate a potential second request investigation
- Divestiture planning — if the agency identifies overlap, the buyer may need to divest businesses or assets to obtain clearance
- Litigation risk — the buyer must assess whether it is willing to litigate against the agency if necessary
For the Seller
- Deal certainty — a second request significantly increases the risk that the deal will not close
- Reverse termination fee — the seller should negotiate an RTF payable if the buyer cannot obtain regulatory clearance
- Hell-or-high-water commitments — the seller may require the buyer to agree to take all actions necessary (including divestitures) to obtain approval
APAC Equivalents
While the second request is US-specific, other jurisdictions have equivalent extended review mechanisms:
| Jurisdiction | Extended Review | Timeline |
|---|---|---|
| EU | Phase II investigation | 90 working days (extendable) |
| Australia | ACCC Phase 2 review | No statutory limit |
| China | SAMR Phase II/III | 90 + 60 days |
| India | CCI Phase II | Up to 150 days total |
| Japan | JFTC Phase II | 90 days |
“A second request fundamentally changes the character of a deal — from a commercial transaction to a regulatory proceeding,” observes Daniel Bae, founder of Amafi. “In cross-border APAC transactions, where multiple jurisdictions may conduct extended reviews simultaneously, the regulatory timeline becomes the critical path for deal execution.”
Managing antitrust reviews across multiple jurisdictions? Amafi helps companies and investors navigate regulatory processes globally. Learn more.