Best Practices for Merger Investigations

Bureau of Competition - August 2015

Since the Commission published the Reforms to the Merger Review Process in 2006,1

several aspects of the merger review process have evolved. First, we learned that parties rarely 

invoked the Merger Process Reforms. Second, firms now rely more extensively on the 

“withdraw and refile” process in connection with the initial review period of Hart-Scott-Rodino

filings. Firms have also become much more sophisticated in the use of electronic discovery and 

search techniques. These developments and others led the Bureau of Competition to review the 

Bureau’s merger investigation practices. Our review identified practices that promote efficiency 

and balance the burden of merger investigations with the need for thoroughness. Based on this 

review, the following guidance provides best practice recommendations for improving the 

merger review process.

These guidelines address early voluntary submission of information, withdraws and refiles, 

timing agreements, negotiating Second Requests, and common presumptions.

1. Early Voluntary Submission of Information

Providing information to staff early is a common best practice. Parties can produce 

information in addition to the HSR filing during the initial waiting period or even before the 

filing is made. This information may resolve staff’s questions about the transaction during the 

investigation’s preliminary phase, which may obviate the need for a Second Request. Or, the 

early submission of key information may allow staff to tailor the Second Request and thus

reduce the burden of production.

Certain key information is always helpful and staff will almost certainly request it. 

Preparing and gathering the following documents and information in anticipation of an HSR 

filing or of a voluntary access letter may expedite the merger review process.

a. Strategic and marketing plans for the previous two years. On a case-by-case 

basis, staff may request these plans further back than two years in order to capture 

a pivotal business development or historic event. Often this is to identify natural 

experiments to investigate how competition works in the industry.

b. A list of all currently manufactured, marketed, or sold products and products in 

development.

c. A list of top 10 customers (and suppliers if relevant) with contact information for 

customers of overlapping products.

d. A list of top competitors with contact information for competitors who provide 

overlapping products.

 1 DEBORAH PLATT MAJORAS, CHAIRMAN, FEDERAL TRADE COMMISSION, REFORMS TO THE MERGER 

REVIEW PROCESS (2006), available at

https://www.ftc.gov/sites/default/files/attachments/mergers/mergerreviewprocess.pdf.
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e. Market share information for overlapping products.

f. A list of the types of reports the company prepares on a regular basis.

g. Information you believe will assist staff in assessing the proposed merger and the 

markets involved.

Beyond these materials, in certain circumstances, it may be beneficial for parties to 

provide some additional documents in the initial waiting period, including:

a. An organization chart. If your client does not have one, this may be a document 

you want to prepare. An organization chart helps staff identify potential 

document custodians or candidates for interviews.

b. A data map. Data maps can be helpful in identifying the types of data your client 

creates and stores and the relationships between the client’s different data sets. 

2. Effective Use of Withdraw and Refile

At times, near the end of an initial review period, open issues may remain that could be

resolved with relative ease with certain information or a bit more time. In certain cases, merging 

parties give staff more time by withdraw their HSR filing and refiling. This procedure resets the 

HSR timing provisions without the need to pay an additional filing fee.

2 Historically, additional 

time during the initial HSR waiting period appears to reduce the likelihood that a Second 

Request will issue and increases the likelihood that any Second Request issued will be narrower

in scope. Of course, a withdraw and refile will not be effective in avoiding a Second Request in 

an investigation that requires substantial review. For more information on the withdraw and 

refile process, read our blog post, Running Time, and a tip sheet put together by the Premerger 

Notification Office.

3. Negotiating the Second Request

Staff will negotiate a Second Request in good faith through meaningful discussions “to 

prevent confusion or misunderstandings regarding the nature and scope of the information and 

material being sought.”3 Second Request negotiations have proven to be important in reducing 

the burden for both sides while still allowing staff to obtain the necessary information to evaluate 

a proposed transaction. Under the FTC Rules of Practice § 2.20, after a Second Request is

issued, staff should initiate a discussion addressing the competitive issues raised by the 

 2 See 16 C.F.R. § 803.12. Written notice is required to initiate a withdraw and refile. Withdraw and refile is 

available only if the proposed transaction has not changed and the refile notice is received within two business days 

after withdrawal. Only the acquiring person (A-side) can withdraw and refile to restart the HSR timing. The 

acquired company (B-side) is not required to update its filing. After one withdraw/refile, another withdraw/refile 

would require a new filing fee (and would not have to be refiled within two days.) Thereafter, another 

withdraw/refile would be available within two days without a filing fee.

3 FTC Rules of Practice 16 C.F.R. § 2.4.
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transaction and the most effective way to obtain information and documents relating to the 

competitive issues raised. The most productive meetings are those in which staff clearly 

communicates the competitive issues raised by the transaction and the information that will be 

required to explore the issues. 

The merging parties can contribute to these negotiations best by explaining the 

organizational and decision-making structure of the parties’ businesses as well as where, how, 

and by whom relevant information is kept. Employees or counsel familiar with company’s

operations, data, storage, and document retention policies should participate in the meeting. 

Parties can further maximize the productivity of the meeting by providing organizational charts

in advance and being prepared to discuss the duties and responsibilities of the individuals with 

relevant documents or information. Understanding the location of pertinent information may 

allow staff to narrow document custodian lists. Equally important in the most successful 

meetings is conveying to staff the structure and content of central files, corporate files, and 

databases. A search of these files will be required regardless of the particular custodians

excluded from further searches. Negotiating the Second Request rarely involved a one-time 

event, and subsequent meetings are common. Our review of previous investigations suggests 

that an early, substantive discussion on issues, custodians, data, and documents leads to less 

costly, more focused Second Requests, which in turn leads to faster compliance and review. 

Document Custodians

The appropriate number of document custodians to search in an investigation varies 

widely by transaction and party. Accordingly, we have not imposed an absolute limit on the 

number of custodians a party must search in response to a Second Request. The Commission’s 

2006 Merger Process Reforms established a presumptive limit of 35 custodians if the parties met 

certain conditions. Although this presumption was rarely triggered, the retrospective survey of 

merger investigations revealed that since the Reforms were promulgated, most merging parties 

who submitted responses to the Second Request searched fewer than 35 custodians. 

Modifications

The Second Request modification process is iterative and can speed up or slow down the 

entire merger review. Under most circumstances you can expect staff to respond to a request for 

modification within two business days. Many times the response will be a substantive answer, 

but in some instances, the response may be that staff is still considering the modification, needs 

additional information to respond to your request, or is consulting with the Bureau of Economics. 

While final modifications will always require a formal letter from staff, parties may expedite the 

process by emailing staff draft modification language. Finally, modification letters will no 

longer require the signature of division management.

Search Terms

Parties increasingly use search terms to comply with a Second Request. The company is 

in the best position to know the types of documents its employees generate and the terminology 
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used in its particular industry. Staff will not agree that a particular list of search terms is 

sufficient for the company to certify compliance with a Second Request. 

Companies may provide a list of search terms in advance of producing documents and 

staff may comment on the proposed search terms. Based upon our review of previous merger 

investigations, we believe that disclosing the search terms to staff in advance of a document 

production improves the likelihood that the search will be sufficiently comprehensive. 

Nevertheless, it is ultimately the company’s responsibility to gather and produce the necessary 

documents and information to comply with the Second Request, regardless of the method the 

company uses to gather and review the documents and information produced. 

Quick Look

If staff’s anticompetitive theory rests upon a specific issue, or the Second Request 

includes multiple relevant product markets, a “quick look” on that issue or a subset of relevant 

products may be sufficient to resolve the anticompetitive concerns without the parties’ full 

compliance with the Second Requests. In a quick look, the parties agree to produce a limited set 

of core documents and information identified by staff. In exchange, staff agrees to analyze the 

materials in a short period and then advise the parties of the outcome of the quick look. 

The 2006 Merger Process Reforms contemplated formalized, written agreements between 

staff and the parties to narrow issues and identify information to be submitted by the parties to 

resolve those issues. The internal review suggests that formal quick look agreements are rare

and protracted negotiations of such agreements may distract from the substantive merger 

investigation. Instead, in many cases, parties and staff together may identify key custodians 

and/or specifications to be prioritized in the search and production of materials responsive to the 

Second Request, and engage in substantive discussions about the material produced. 

Timing Agreement

Parties should expect staff to request a timing agreement in cases that require substantial 

review. Timing agreement discussions should begin as early as possible, and may be initiated by 

staff or the parties, who should work together to form an overall investigational plan. The 

amount of time staff requires to complete their investigation often depends on the size and scope 

of the investigation, as well as the parties’ demands. For example, a merger investigation 

involving a large number of product and geographic markets may require more staff time than a 

case with a more limited scope. Similarly, if parties ask staff to engage in settlement 

discussions, focus on peripheral markets, review and discuss white papers, or otherwise create 

staff resource constraints, staff likely will require additional time to complete the investigation.

We hope these guidelines will assist parties in reducing the burden of the merger review 

process. Although it is most expeditious to resolve issues at the staff level when possible, if at 

any point in the process significant issues are not being addressed or resolved, the parties should 

contact Division management and/or the Bureau Director’s office.