A summary of the general procedures and practices for a business combination
This article provides a summary of the general procedures and practices for a business combination. A business combination may be carried out through a plan of arrangement or an amalgamation (also commonly referred to as a merger). Currently, acquisitions of Canadian public companies are most often completed by way of a plan of arrangement.
See Chinese version below.
Plans of Arrangement
The corporate statutes in Canada generally provide that companies can be merged and their outstanding securities can be exchanged, amended or reorganized through a court-supervised process known as a plan of arrangement.
The target company will apply ex parte for an initial court order directing the target company to seek the approval of its shareholders and fixing certain procedural requirements for obtaining such approval. A management information circular will be prepared by the target company and mailed to its shareholders containing prescribed information, including prospectus level disclosure about the acquiror (including pro forma financial statements) if the acquiror’s securities form part of the offered consideration. Unlike with a take-over bid circular and directors’ circular, this management information circular is not required to be translated into French, although a French language version is often provided where there are a significant number of shareholders in Québec. Plans of arrangement require both shareholder approval (generally by a special majority vote of 66 ⅔% of votes cast at the shareholder meeting) and final court approval (based on compliance with the initial court order and a determination by the court as to the substantive fairness of the arrangement). A plan of arrangement provides maximum flexibility to implement various structuring aspects of a transaction that might not be possible to implement under a take-over bid or merger/amalgamation. A plan of arrangement will generally also enable the issuance of securities of the acquiror to U.S. holders of the target company without requiring such securities to be registered in the U.S.
If the acquiror is a TSX-listed company and is issuing shares under a take-over bid or plan of arrangement that would cause dilution to its shareholders of more than 25%, it will be required by the TSX to seek approval from its own shareholders prior to completing any such transaction.
Where an acquiror believes that it is highly likely that the holders of over two-thirds of the outstanding target company shares will support the transaction, but that it is unlikely to achieve a 90% tender in a take-over bid and there is no need for the structuring flexibility offered by a plan of arrangement, the acquiror may prefer to propose a going-private merger. Pursuant to a going-private merger, the target company will be amalgamated with an affiliate of the acquiror and all of the target company’s shareholders will exchange their shares of the target for whatever consideration is being offered (either cash or shares of the acquiror). A shareholder meeting of the target company is needed to approve the merger, generally by the vote of shareholders holding 66 2/3 % of the votes cast at the meeting. This transaction has the advantage in these circumstances of achieving 100% ownership of the target by the acquiror in a one-step transaction, instead of the two steps required pursuant to a take-over bid followed by a squeeze-out merger, and unlike with a plan of arrangement, the merger/amalgamation is not subject to a court-supervised process.
The securities laws of certain Canadian provinces contain complex rules governing transactions between a public company and parties that are related to it (i.e., major shareholders, directors and officers) and that are of a certain threshold size. These rules are designed to prevent related parties from receiving a benefit from a public company to the detriment of its minority shareholders without their approval.
A take-over bid made by a related party of the target company (i.e. an “insider bid”) will engage these special rules. In particular, a formal valuation of the target company’s shares prepared by an independent valuator under the supervision of an independent committee of the target company’s board will generally be required.
If the acquiror in a plan of arrangement or merger/amalgamation is related to the target company or if a related party is receiving a “collateral benefit,” these rules will also generally apply. In particular, approval by a majority of the minority shareholders (i.e., shareholders unrelated to the acquiror or any related party who receives a collateral benefit) will generally be required in addition to the shareholder approval required by applicable corporate law. Where the related party is acquiring the target company or is a party to a concurrent “connected transaction” of a certain threshold size, then a formal valuation of the target company shares, prepared by an independent valuator under the supervision of the target company’s board or an independent committee of directors, may be required.
这篇博客文章概述企业合并的程序步骤。 企业合并有两种，一种是安排计划，还有一种是合并 （也通称兼并）。目前，加拿大上市公司的收购通常是通过安排计划的方式来完成的。