Tag archives: Regulatory

Canadian Government Announces New Policy Applying “Enhanced Scrutiny” to Certain Foreign Investments During COVID-19

Market Contraction

The financial markets and global economy have experienced a precipitous decline and substantial volatility due to the economic impact of the ongoing COVID-19 pandemic. This has had a significant and immediate impact on the level of M&A activity, both in Canada and globally, as companies are shelving deals or simply walking away entirely.

In fact, Thomson Reuters, citing data from the financial research firm Refinitiv, recently reported that there was a 57% decline in M&A activity in Q1 2020 as compared to Q1 2019, as Canadian M&A activity dropped to its lowest level since 2015. Globally M&A activity … Continue Reading

2020 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 now both been released for 2020. The Commissioner of Competition announced on April 1 that the threshold would remain the same as in 2019.

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, … Continue Reading

NAFTA 2.1: Bringing certainty to an uncertain time

If there is anything that Canadian dealmakers are all too familiar with in 2019, it’s the concept of uncertainty. Raging trade wars, geopolitical tensions, elections, and a forecasted economic downturn are all pervasive in everyday conversation. Despite this, deal flow has remained robust throughout the first three quarters of 2019, as summarized in a recent post. Fortunately, significant uncertainty in relation to trade with the U.S. and Mexico is hopefully coming to an end.

Representatives from Canada, the U.S. and Mexico met last week to sign what some are calling “NAFTA 2.1” but is formally known as the Canada-United … Continue Reading

Parties to M&A must be diligent about climate change

Climate change has become a high profile issue that is expected to have significant implications for M&A transactions going forward. As public awareness and scientific understanding of climate change continues to evolve, we are more informed about the climate change-related risks that businesses must grapple with and get ahead of. As a result, businesses need to be especially diligent in their assessment of a range of factors that may be impacted by the changing climate when completing M&A transactions. While the risks that should be considered will, of course, vary between transactions, the following is a list of climate-related factors … Continue Reading

CANADA’S COMPETITION BUREAU IS KEEPING AN EYE ON SMALL M&A DEALS

The Competition Bureau (the “Bureau”) is required to review certain merger transactions that exceed various financial thresholds, based on the size of the business being acquired and the combined size of the buyer, the target business, and their affiliates. The notification thresholds under the Competition Act (the “Act”) are discussed in more detail here. The Bureau reviews transactions that exceed these thresholds (“notifiable transactions”) to assess the potential competitive effects of the deal prior to its completion, and if the Bureau concludes that a transaction is likely to substantially lessen or prevent competition, they may seek a remedy (such … Continue Reading

Global payments industry: frantic M&A activity not slowing down

A payments industry that was stagnant and stale for decades has recently entered a transformational and disruptive period of innovation, with seemingly boundless growth ahead.

Payments players have engaged in record-setting levels of global mergers and acquisitions (M&A) activity over the course of the past few years, but 2019 is poised to be yet another banner year for deal-making in the payments space. Rather than showing signs of plateau, this crescendo is set to continue beyond the immediate future.

The frenetic pace of M&A activity in the payments space recently has grown out of a confluence of factors. Private equity … Continue Reading

A-I Captain! Know the legal risks of buying an AI company… or go down with the ship

On February 21, 2019, Blackberry completed its acquisition of Cylance, a privately-held artificial intelligence (AI) and cybersecurity company. Acquisitions of AI companies like Cylance are becoming increasingly common as businesses seek to realize the opportunities in offering much-improved products or services to their customers. Canada, in particular, has become a hotspot for activity in the AI industry.

Acquiring an AI company is not always smooth sailing. There are common risks that buyers must be aware of prior to embarking on an acquisition.

Know where the data comes from

An AI derives its value from data sets used … Continue Reading

There’s snow business like snow business: considerations for your off-season acquisition

Eastern Canada’s ski season has officially come to a close. However, there is more reason than ever to keep an eye on the moguls.  While activities on the slopes may have ceased, market activity is often at its peak during the off-season (pun intended). For example, in April 2017, Aspen Skiing Co purchased Intrawest – the company that owned the Blue Mountain and Mont Tremblant ski resorts – for $1.5 billion US.  In August of the year prior, Vail Resorts similarly agreed to purchase Whistler Blackcomb for $1.4 billion.

For buyers considering such an investment this off-season, the following considerations … Continue Reading

Tax competition is coming – review of the Federal Fall Economic Update

On November 20, 2018, the federal Government of Canada released their Fall Economic Update – a review of the country’s finances and economic health that addresses trends and changes taking place in Canada and the world since the federal Budget in the spring.

Of particular note in 2018 was the anticipated response to the U.S. tax reform enacted by the Trump administration. In addition to slashing corporate tax rates from approximately 35% to approximately 27% (including state taxes) – an amount that puts pressure on Canada’s corporate tax rates, which vary between 26.5% and 31% – the U.S. tax reform … Continue Reading

Tokenizing securities: is it worth it?

Tokenization refers to the process of converting the right to an asset into a digital token, issued, stored, and transferred on a blockchain (the latter of which we’ve covered previously). Many real world assets can be tokenized, including fine art and real property.

Of particular interest in corporate finance is the tokenization of securities, such as bonds, stocks, and derivatives. A crucial feature of security tokens is that they would be issued in full compliance with securities laws and regulations, making them more appealing to institutional investors.

Lower costs, higher liquidity

Private securities are often significantly less … Continue Reading

Quebec opens its door to InsurTech: opportunities to grasp

The insurance industry is changing. A more digitally savvy customer base and the emergence of new technologies are reshaping the sector. Enter technology-led companies known as “InsurTechs.”

In Québec, this innovative business approach along with a substantial legislative change is expected to increase M&A transactions.

Mindful of offering a regulatory environment that is flexible and apt to respect the evolution of technologies and consumers’ needs, the province adopted Bill 141, An Act mainly to improve the regulation of the financial sector, the protection of deposits of money and the operation of financial institutions, on June 13, 2018. This … Continue Reading

U.S. banking M&A on the rise and may extend to Canadian financial market

According to a recent article published by Pitchbook, this year has already shown a positive momentum for deal-making in the U.S. banking industry – a trend worth monitoring as it is expected to surge further as the year progresses and U.S. banks (especially those that already have a Canadian presence) may be looking to acquire financial assets and operations north of the border.

Most recently, Citizens Business Bank announced that it would acquire Community Bank, pursuant to which Citizens’ total assets will increase from U.S. $878 million to U.S. $12 billion. This acquisition represents one of 19 M&A transactions that … Continue Reading

Global trends in insurance M&A

As reported in KPMG’s 2015 report on trends driving the insurance M&A landscape, strong balance sheets and continued confidence resulted in a steady flow of targeted mergers and acquisitions over the past year. Another active year for insurance industry M&A is expected. The report predicts four broad drivers of M&A activity in the global insurance landscape in 2015:

High growth markets

Insurance M&A may get a boost from Africa, where long-term population growth, forecasted GDP growth and the potential for financial services growth through mobile technology presents opportunities.

As well, reverse deal flow (involving acquirers from high growth markets investing … Continue Reading

Acquisitions of freight carriers and other commercial vehicle operators: the road to regulatory compliance

Transport by road is a major and developed industry in Canada and the United States. The acquisition of a freight carrier – a commercial vehicle operator – may trigger varying levels of regulatory registration and compliance requirements, depending on how the transaction is structured. The same concerns will often arise in acquisitions of entities that are not freight carriers, but operate a commercial vehicle as part of their business. The regulatory framework applicable to commercial vehicle operators can be surprisingly complex and should be taken into account when acquisitions are contemplated.

Generally, freight carriers have three basic types of regulatory … Continue Reading

Webinar – M&A in 2013: spin-offs, an overview

Join us on Thursday, December 12, 2013 for a webinar on spin-offs.

Register now

In this web seminar, partners from Norton Rose Fulbright with extensive transactional experience will discuss how spin-offs can be a valuable tool in executing a company’s overall business strategy, as well as the key areas to address when considering a spin-off in the current tax and regulatory environment.

Speakers

Time

10:00 am – 11:00 am PST
11:00 am – 12:00 pm MST
12:00 … Continue Reading

Higher Investment Canada Act & Competition Act Thresholds for 2012

 Under the Investment Canada Act, Canada’s foreign investment review law,  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 exceed a prescribed threshold.  Effective February 25, 2012, that threshold is $330 million, up from the 2011 threshold of $312 million. 

Under the Competition Act, Canada’s antitrust law, there is a two-part test for determining whether a pre-merger notification is necessary. The test is based on the size of the parties and the size of the transaction.  Under … Continue Reading

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