Competition Bureau Increases the “Transaction-Size Threshold” for Pre-Merger Notification
Last week we discussed the new merger review guidelines released by the Competition Bureau of Canada. On Tuesday, February 7, 2012 the Bureau announced additional changes to one of the key thresholds that trigger pre-merger notification and the review process discussed in our earlier post.
In Canada, parties are required to notify the Commissioner of Competition where a contemplated transaction triggers two thresholds: the “size of transaction threshold” and the “size of parties threshold”.
Where a transaction involves the combination of multiple entities, the “size of transaction threshold” is measured based on the aggregation of either the value of assets in Canada or the gross revenues from sales in/from Canada generated by such assets. This applies to transactions involving an amalgamation, combination or acquisition, share acquisition or the acquisition of an interest in a combination. Where the value of this aggregation reaches a stipulated “size of transaction threshold”, it may trigger pre-merger notification to the Commissioner of Competition.
The stipulated amount for this threshold changes annually. Beginning on or about February 11, 2012 the “size of transaction threshold” increased to $77 million from the 2011 threshold of $73 million.
The second trigger for pre-notification review relates to the aggregated size of the parties. In general, this “size of parties threshold” requires notice to the Commissioner where the parties to the transaction, together with their affiliates, have either assets in Canada or gross revenues from sales in, from and into Canada that exceed $400 million. This amount is not adjusted annually and will remain constant in 2012.
Stay tuned for our next post, which will discuss strategies to address recent developments in the regulatory review process.
amalgamation combination competition merger review private transactions public M&A share acquisition