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Mergers and Acquisitions in Canada


Canada’s competition (or antitrust) law is found in the Competition Act[[(R.S., 1985, c. C-34).]] (the “Act”), a federal statute generally applicable to all industries throughout Canada. There are no provincial statutes of general application that provide for merger notification or review for the purpose of a competitive impact assessment.

Parties proposing mergers and acquisitions, or similar tywpes of transactions, must consider two issues:

  1. 1.     Is the transaction one that is subject to notification obligations before it can be completed?
  1. 2.     Is the transaction one that will attract close review and a challenge by the Canadian Competition Bureau (the “Bureau”)?

The Act contains merger notification provisions analogous to those in the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976.[[15 U.S.C s.18.]] Substantive merger review and challenge provisions are similar to the standard found in section 7 of the Clayton Act.[[15 U.S.C s.12 et seq.]]

Additional posts from the blog

May

21

New Bill Heightens Potential for More Investment Canada Reviews of SOE Acquisitions

by Sandra Walker

Last week the Canadian Government introduced amendments to the Investment Canada Act (ICA) to implement its revised policy towards state-owned enterprises (SOEs) which it announced in December last year. At that time, while it approved the acquisition by Chinese SOE, CNOOC, of Canadian oil and gas company, Nexen, the Government announced its intention to prohibit acquisitions of control of Canadian oil sands businesses by SOEs except on an exceptional basis. It also stated that joint ventures and minority investments were welcome. In addition, the government indicated it would closely monitor SOE acquisitions in other sectors of the economy and would distinguish between SOE and non-SOE investments when setting the ICA review threshold. (See Focus on Foreign Investment Review, December 2012)

May

13

The Autorité des marchés financiers Proposes An Alternative Approach to Securities Regulators Intervention in Defensive Tactics

by Guy Paul Allard

On March 14, 2013, the Autorité des marchés financiers (“AMF”) published for comments a consultation paper (the “AMF Proposal”) pertaining to defensive tactics in response to take-over bids. This consultation is taking place concurrently with the one launched the same day by the Canadian Securities Administrator (“CSA”) with the release of proposed National Instrument 62-105 Security Holder Rights Plans and proposed Companion Policy 62-105CP Security Holder Rights Plans (collectively, “62-105”). Unlike the CSA’s 62-105, the AMF Proposal addresses all defensive tacticsii, not only security holders rights plans.

May

10

Proposed New Framework for Rights Plans a Potential Game Changer for Hostile Bids

by Daniel Katzin

The Canadian Securities Administrators published for comment a proposed new regulatory framework for rights plans under proposed National Instrument 62-105 Security Holder Rights Plans and proposed Companion Policy 62-105CP Security Holder Rights Plans (collectively, “62-105”). If adopted, 62-105 would provide issuers with a game changing tool to respond to hostile take-over bids, where a target board will be able to use a rights plan as leverage to negotiate with a potential bidder.



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