Topic: Antitrust, competition and regulatory

Subscribe to Antitrust, competition and regulatory RSS feed

Investment Canada Act update: new thresholds and national security in the news

Threshold now $1 billion

As a result of recent amendments, most direct acquisitions of control of a Canadian company now only require prior approval of the Minister of Innovation, Science and Economic Development under the Investment Canada Act if the enterprise value of the Canadian business exceeds $1 billion.  That is expected to reduce the number of transactions that will require a foreign investor to persuade the Minister that the deal is likely to be net benefit to Canada before it can be completed.

As outlined in an earlier post, under amendments to the Investment Canada Act first introduced … Continue Reading

Chinese capital controls shake-up global M&A market

In late 2016, the Chinese State Council announced new capital controls were to be put in place as of January 1, 2017, with the aim of reducing the outflow of currency from China. These new measures are seen as likely to have significant impacts on industries around the globe, such as housing markets and insurance, as well as the broader market for international mergers and acquisitions (M&A) by initiated by Chinese companies around the world.

Crackdown on money laundering

One of the principal aims of the regulations appears to be a crackdown on money laundering through the purchase … Continue Reading

2017 merger review thresholds for Competition Act and Investment Canada Act

The threshold for certain pre-closing net benefit reviews under the Investment Canada Act (ICA) and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2017.

Competition Act

Canada uses a two part test for determining whether a pre-merger notification is necessary. The two-part test is based on the size of the parties and the size of the transaction. The transaction size component can be adjusted annually for inflation. Under the size of the parties test, the parties, together with their affiliates, must have aggregate assets in Canada or annual gross revenues from … Continue Reading

National security guidelines shed light on Investment Canada review process

On December 19, 2016, the Government of Canada issued long-sought guidelines to help foreign investors and their advisors understand the national security review process under the Investment Canada Act (ICA). Following amendments to the ICA in 2009 the government has had the explicit authority to review investments in Canadian businesses by non-Canadians to determine whether they “could be injurious to national security,” a term that was not defined in either the statute or the accompanying regulations.

Given the subject matter, both the previous and current governments have maintained that they are often constrained in what they can tell foreign investors … Continue Reading

Bitcoin update: cryptocurrency remains rare in M&A transactions despite potential

Bitcoin remains a fringe currency in the context of M&A transactions. Despite some notable advantages over fiat currency, the risks associated with funding a large transaction using the cryptocurrency have limited its use to deals between players in the Bitcoin space. This article provides an update to our previous article on Bitcoin’s viability as a currency for funding M&A transactions.

To date, there have been three notable M&A transactions funded with Bitcoin. Only one of these transactions was completed within the last year, with the other two closing in 2013. The initial excitement over Bitcoin’s use in M&A deals was … Continue Reading

Ontario’s Bulk Sales Act: Repeal at last?

Last year we reported on Ontario’s distinction as the only Canadian province that has not repealed its century-old Bulk Sales Act (the Act).  With its goal of creditor protection now served by more modern legislation, the Act is generally viewed as a nuisance, adding time and cost to transactions.  However, the wait may soon be over, as Ontario recently introduced legislation that would repeal the Act.

The aim of the Act is to protect creditors from a vendor selling its assets without first paying its debts owed to creditors.  The Act achieves this aim by imposing certain duties on … Continue Reading

Canada and the EU: update on CETA

Negotiations between Canada and the European Union (EU) on the Comprehensive Economic and Trade Agreement (CETA) began in 2009. In October 2013, an agreement was reached in principle and last month, it was reported that the legal review of CETA has finally been completed. Some reports indicate that CETA could come into effect next year.

In October, 2013 this blog commented on the possibility that CETA “may be good for business in M&A”, specifically citing the proposed increase in the threshold for government review of foreign direct investment by EU companies in Canada as compared … Continue Reading

M&A implications of recent Federal actions regarding corruption and bribery

Over the past decade, Canada has joined a growing coalition of governments from around the world in toughening its stance against the improper influencing of foreign and domestic government officials. Two recent Government of Canada initiatives encourage acquirers involved in extractive resource industries, or with service contracts with the federal government, to enhance their diligence efforts to account for new susceptibilities related to corruption and bribery.

Extractive resources industries

On March 1, 2016, the Department of Natural Resources issued finalized implementation tools that provide more precise guidance on the underlying disclosure obligations of companies required to comply with the Extractive Continue Reading

New merger review thresholds for Competition Act and Investment Canada Act

The threshold for certain pre-closing net benefit reviews under the Investment Canada Act (ICA) and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2016.

Competition Act

Canada uses a two part test for determining whether a pre-merger notification is necessary. The two-part test is based on the size of the parties and the size of the transaction. The transaction size component can be adjusted annually for inflation. Under the size of the parties test, the parties, together with their affiliates, must have aggregate assets in Canada or annual gross revenues from … Continue Reading

Competition law implications of M&A: part II

As discussed in a previous post on this blog, a merger or acquisition will be barred where it is found to prevent or substantially lessen competition in a market (Competition Act, s. 92(1)). The Commissioner’s ability to apply to the Competition Tribunal (the Tribunal) to inhibit a merger or acquisition applies to both proposed and completed transactions (Competition Act, s. 92(1)). Although formal approval is not required to close a transaction, the Competition Act (the Act) sets out mandatory and voluntary steps that parties to a merger or acquisition should consider before closing:… Continue Reading

Competition law implications of M&A

Ever wondered why competition regulators in both Canada and the US sometimes put the brakes on M&A deals? As mature markets become increasingly concentrated while smaller players are bought out and entities merge to achieve greater economies of scale, we continue to see headlines featuring the involvement of competition regulators in M&A transactions. But if we value the concept of ‘free markets,’ why are governmental bodies involving themselves in private transactions?

Adam Smith, one of the earliest proponents of modern capitalism, was a strong supporter of competition (antitrust) law. In his Inquiry Into the Nature and Causes of the Wealth Continue Reading

Keeping up with the Competition Bureau: recent position statements

Under the Competition Act, RSC 1985 c. C-34, the Competition Bureau (Bureau) reviews mergers to assess whether they are likely to substantially lessen or prevent competition in one or more relevant markets. As stated in its Merger Enforcement Guidelines (Guidelines), the Bureau generally makes its determination by assessing the competitive effects of the merger in those markets where each party to the merger supplies products that are substitutes between each other (Relevant Market).

In an effort to promote transparency around its processes and its analytical approach to merger reviews, the Bureau publishes Position StatementsContinue Reading

Privacy breaches and M&A transactions: the importance of due diligence and doing it cautiously

world-mapData and privacy breaches have garnered much media attention as of late and the list of companies that have experienced a breach is mounting. The potential costs to companies resulting from large-scale privacy breaches are immeasurable. In addition to the costs associated with resulting litigation (often in the form of privacy breach class actions), publicized breaches come with reputational harm.

As a result, companies and organizations considering M&A must be alive to privacy issues and privacy laws. While appropriate due diligence can help guard against liability for privacy breaches, companies should be aware that there are privacy risks associated with … Continue Reading

Multi-jurisdictional merger control: a global transaction case study

Join us on Wednesday, April 29, 2015 for a breakfast seminar on multi-jurisdictional merger control: a global transaction case study.

Register now

Please join us as our panel of merger control lawyers from around the world will offer practical advice for in-house counsel on how safely and effectively to navigate the increasingly complex web of merger control laws when planning a global transaction. Using a case study, our competition law lawyers will provide tips and strategies for managing transactions that implicate multiple jurisdictions’ merger control regimes.

Topics will include:

  • determining in which jurisdictions to submit merger control filings
  • coordinating multiple
Continue Reading

International Financial Law Review Merger Control Survey 2015

The International Financial Law Review  (IFLR) merger control survey provides a comprehensive overview of the key issues and trends in global merger control in 21 jurisdictions.

Norton Rose Fulbright was invited along with other local law firms across the Americas, Europe and Asia Pacific to answer a series of questions in relation to the notification thresholds, extraterritorial reach and tests for merger clearance.

On behalf of Norton Rose Fulbright, Nick McHugh, Kevin Ackhurst, Marc Waha, Jay Modrall, Maxim Kleine, Ian Giles, Daniel L. Wellington, and Neely B. Agin contributed to the … Continue Reading

Foreign investment rule changes: narrowed scope but deeper reach

On March 25, 2015 the Canadian government published two long-awaited regulations amending the Investment Canada Act. One is intended to reduce the number of transactions that are subject to pre-closing review and approval, but will increase the amount of detailed information required in routine filings for transactions that are not reviewable. The second will lengthen the period for transactions undergoing a national security review by providing the government additional time to complete such reviews.

Thresholds for Review

Under the Investment Canada Act, the acquisition of control of a Canadian business by a non-Canadian is generally subject to pre-closing review … Continue Reading

New merger review thresholds for Competition Act and Investment Canada Act

The threshold for a pre-closing net benefit review under the Investment Canada Act and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2015.

Investment Canada Act

The direct acquisition of control of a Canadian business by a non-Canadian from a WTO-member country is subject to pre-closing review and approval where the assets of the acquired business had a net book value of more than $369 million as at the end of the target’s last completed fiscal year prior to the acquisition. The 2014 threshold was $354 million. Amendments to the ICA to change … Continue Reading

Supreme Court clarifies test for merger review in Canada

Lays waste to Commissioner’s case on efficiencies, but serves as reminder of hazards of internal documents

On January 23, 2015, the Supreme Court of Canada (SCC) released its much-anticipated decision in Tervita Corp. v Canada (Commissioner of Competition). In 2011, the Commissioner of Competition (Commissioner) challenged Tervita Corp.’s merger with a potential competitor, Complete Environmental Inc., and in 2012 the Competition Tribunal (Tribunal) ruled in favour of the Commissioner and ordered Tervita to divest itself of the assets it had acquired. The Federal Court of Appeal (FCA) upheld that decision. In … Continue Reading

Doing business in Canada: M&A considerations

canadian-flag-on-buildingCanada is a top destination for foreign companies and investors attracted to our wealth of natural resources, stable and sound political and financial systems, and world-class infrastructure. While Canada is an open economy and welcoming of foreign investment, there are issues that corporations and investors should keep in mind when doing business in Canada. Norton Rose Fulbright’s guide, Doing Business in Canada, provides a general overview of the principal corporate, tax and other legal considerations that would be of interest to foreign businesses wishing to establish or acquire a business in Canada.

Of particular interest in the M&A context, … Continue Reading

Havenly acquisitions: tax inversions may contribute to M&A activity

2014 is increasingly looking like a celebratory year in Canadian M&A. Despite a mild downturn in Canadian M&A deal flow in 2013, a steady increase in high-profile transactions in 2014 suggests that M&A activity continues to gain momentum, particularly in the retail and consumer product industries. The Canadian M&A market experienced a very strong second quarter with both deal value and volume up 10% from Q1 2014 and nearly 20% on a year over year basis. A recent Canadian Business article suggests that reasons for the upturn are low interest rates, combined with an accumulation of capital in private equity … Continue Reading

Seminar: Norton Rose Fulbright’s 7th Annual Mergers & Acquisitions School

On Wednesday, September 10, 2014 to Wednesday, October 22, 2014 from 6:30 pm – 8:30 pm (US/Central), Norton Rose Fulbright  will be presenting its 7th Annual Mergers & Acquisitions School for corporate, in-house legal, investment banking and private equity professionals in Houston, Texas.

This comprehensive program is designed for participants that desire to develop a thorough understanding of the M&A process and agreements from a legal perspective. Invited organizations will have the exclusive opportunity to enroll up to two professionals.

Class Syllabus

Wednesday, September 10, 2014

  • Confidentiality, Non-Solicitation and Non-Circumvention Agreements • Legal Structures of Transactions – Asset Acquisitions, Stock/Equity
Continue Reading

A global M&A technology boom

The global volume of M&A transactions in the technology sector is on the rise – from North America to Asia, M&A numbers in the tech industry are reaching heights not seen since 2001.

In both its M&A Trend Report: Q1 2014 and Global Technology, Media & Telecommunications Trend Report: H1 2014, Mergermarket reported that Global Technology, Media and Telecommunications M&A volume was up 55% in Q1 2014 compared to Q1 2013. The Q2 outstripped the Q1 results in 2014, with the value of deals tripling from Q2 2013. A significant portion of this growth is originating from North America, … Continue Reading

Hidden dangers in M&A: bribery and corruption

Embarking on an international M&A transaction can be an exhilarating time for any company, although there are a host of business and legal issues involved in choosing an appropriate target. One issue that often gets overlooked is the target company’s anti-corruption and bribery practices. As Canadian companies continue to grab up international market space, they must be wary of the hidden practices of their partnering company.

Why consider anti-corruption and bribery practices?

According to a PricewaterhouseCoopers article, an increasing number of Canadian companies are looking overseas for expansion opportunities. In fact, 40% of Canadian CEOs see their growth coming from … Continue Reading

Bureau allows Reynolds to acquire Novelis’ North American foil business

On November 15, 2013, Reynolds Consumer Products, Inc. (Reynolds) agreed to acquire the North American division of  Novelis Foil Products for $35 million. Six months later, on May 26, 2014, the Competition Bureau (Bureau) allowed the acquisition by issuing a No Action Letter to Reynolds and announcing that the merger would be unlikely to cause a substantial lessening or prevention of competition.

Transaction Background

Both parties manufacture and supply aluminum foil wrap and semi-rigid aluminum containers. Novelis operates two manufacturing plants and three distribution facilities in Canada, while Reynolds manufactures in the U.S. and distributes to … Continue Reading

LexBlog