Originally published in Blakes Bulletin on Competition,
Antitrust & Foreign Investment, June 2010
On June 2, 2010, the Canadian Competition Bureau (Bureau)
published its policy on information sharing in the context of
hostile or unsolicited take-over transactions. To view the policy
relating to hostile transactions, click here. The new policy has the potential
to fuel the use of "antitrust poison pills" in hostile
take-over bids. It should be noted that like other Bureau policies,
the new policy is not law, but rather summarizes the Bureau's
current views on this issue.
To frame the issue: on the one hand, bidders often wish to
commence a Bureau review as soon as possible to take
competition-related bid conditions off the table. On the other
hand, targets often wish to know the status of the Bureau's
review, both to evaluate possible competing bids, and in some
– albeit rare – circumstances to fuel take-over
defences or create regulatory delays, known as an "antitrust
From the enactment of the merger review provisions of the
Competition Act in 1986, the Bureau has articulated a
strong policy of not interfering in the public market for corporate
control. In this regard, the Competition Act places limits
on the length of time for a merger review, and the information that
the Bureau can disclose to a target. Moreover, the only obligation
on the Bureau in terms of information sharing with a target is to
immediately advise of the date upon which the Bureau received a
filing from a bidder, so as to enable the target to submit its
required half of the merger filing within the period of time set
out in the Competition Act.
The Bureau's new policy, however, provides that where the
Bureau shares "pertinent" information with the bidder, it
will strive to disclose such information "equitably" to
the target as well (subject to statutory restrictions on the
disclosure of confidential information). Information the Bureau
considers to be "pertinent" includes:
information on the complexity rating of a proposed
the date upon which the parties have made various filings;
the Bureau's preliminary and final views on market
definition and other factors relevant to its assessment; and
its preliminary and final conclusions on whether the proposed
transaction is likely to prevent or lessen competition
The Bureau notes that hostile transactions "can give rise
to particularly complex considerations that may impact the
straightforward application" of this policy (e.g., in
circumstances involving multiple competing bids) such that a
case-by-case assessment may be required.
What does this mean for businesses? For bidders
in unsolicited take-over bids, the new policy increases the
importance of identifying and addressing any competition issues
with the Bureau as soon as possible since the new policy may lead
targets to be more proactive in the merger review process than
traditionally has been the case. For targets, it means that they
should receive a greater degree of transparency from the Bureau
than in the past. Depending on the facts, this could be of
importance in respect of any possible defence strategies and
perhaps in respect of discussions with a white knight, particularly
where the white knight does not pose similar competition
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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