Canada: Merger Timing Guidelines Released for Comment: Something Old, Something New

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, June 2010

What? The Competition Bureau published its draft Fee and Service Standards Handbook For Merger-Related Matters. According to the Bureau, the draft Handbook is intended to provide insight into how, under the amended merger review process enacted on March 12, 2009, the Bureau determines the length of time it will need to review a merger transaction (the service standard). The length of time, according to the Bureau, depends on the complexity of the transaction under consideration. To view the draft Handbook, click here.

When? The draft Handbook was published for comment on May 31, 2010. Interested parties may provide comments on the draft Handbook until August 2, 2010.

Commentary. Notwithstanding the new merger regime adopted in Canada on March 12, 2009 (which creates an initial statutory waiting period of 30 days for the review of mergers), the draft Handbook suggests that "complex" and "very complex" transactions could require up to 60 days and 120 days, respectively, for the Bureau to complete its substantive review of a proposed transaction.

With respect to mergers in which the Commissioner of Competition (Commissioner) issues a supplementary request for information (SIR), the draft Handbook provides a 30-day service standard, within which the Bureau endeavours to complete its review after certification, which aligns with the 30-day statutory waiting period that is triggered upon filing a materially complete SIR response. A SIR should only be issued in cases where the Bureau requires additional information. These cases are likely to be those the Bureau feels are "very complex". Thus, it is not clear in the draft Handbook how the "very complex" 120-day time-frame relates to the 30-day SIR time-frame; this issue ought to be clarified in the final version of the Handbook.

The draft Handbook also introduces a "pull and re-file" policy in respect of notification filings, arguably bringing the Canadian system more in line with a practice which has emerged in the U.S. in this regard.

It should be noted that notwithstanding the above draft service standard policy, the Competition Act actually contemplates that parties may close a transaction immediately 30 days after submitting an initial merger filing, unless a SIR (which is equivalent to a "second request" in the United States) is issued, in which case the parties may close 30 days after compliance with the SIR regardless of the status of the Commissioner's review. This is the practice in the United States. It had been hoped that the new law, which was supposed to bring Canada in line with the United States, would lead to almost all mergers being cleared within the initial 30-day period, and with only a few being subject to the second request or SIR process. In this sense, the proposed time-frames in the draft Handbook remain misaligned with the statutory framework. No doubt this will form part of the commentary on the draft Handbook in the next two months.

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