Canada: New Interpretation Guidelines On Pre-Merger Notification Released By Competition Bureau

On March 23, 2012, the Competition Bureau announced its publication of two draft Pre-Merger Notification Interpretation Guidelines for public consultation.

The publications, dubbed Pre-Merger Notification Interpretation Guideline Number 12 and Number 14 relate respectively to the requirement to submit a New Pre-merger Notification and/or ARC Request Where a Proposed Transaction is Subsequently Amended, and Duplication Arising from Transactions Between Affiliates.

Guideline # 12: Amended Transactions

Under the Competition Act, parties to a proposed transaction that exceeds the monetary thresholds set out in sections 109 and 110 are required under section 14 to notify the Commissioner and supply the Bureau with information prescribed by the Regulations.

In situations where a proposed transaction is amended after the parties have notified the Bureau and/or submitted an ARC request to the Commissioner, the Bureau may require a new notification or ARC to be submitted to reflect the changes made to the transaction. The new draft Interpretation Guideline No. 12 is intended to clarify the Bureau's policy with respect to such revised notifications/ARC requests. In particular, the Guideline states that the Bureau will take the following considerations into account prior to requesting a new notification and/or ARC request in circumstances where a proposed transaction has been amended:

  1. The correctness of the information contained in the notification in respect of the amendments made to the proposed transaction; and
  2. Whether the amendments to the proposed transaction that is the subject of the ARC request will result in the Bureau having to conduct a more in-depth or revised competitive effects analysis.

Interpretation Guideline # 12 describes certain amendments to a transaction and the likelihood that a revised notification and/or ARC request will be required:

New Notifications

  • Addition of a New Party: Where a transaction is amended to add a new party, a new notification with the prescribed information for the added party will be required. However, pursuant to subsection 109(2) of the Act, a new vendor in a share transaction is not a "party" to the transaction, and the Guideline also states the Bureau's view that a mere guarantor is also not required to file. New notification will also not be required in cases where an affiliate of a notifying party is added except where there is an addition of a significant affiliate whose information was not supplied, in which case an amended filing will be required (and a new waiting period will commence).
  • Addition of a New Asset: Whether adding a new asset to a transaction will require a new notification will depend on whether the information contained in the existing notification will be correct "in all material respects". In cases where the asset being added is ancillary to the existing assets, the information contained in the existing notification may be accurate and the Bureau will not require a new submission, but the Guideline states the view that addition of a material new asset will typically require a new notification. In determining whether an asset is ancillary the Bureau states that it will evaluate both quantitative and qualitative factors, e.g. book value of the added asset, relation to existing assets, and relative size.
  • Addition of New Voting Shares or Redistribution of Assets, Voting Shares or Ownership Interests: Normally, any of these amendments will require a new notification in order to ensure material accuracy. However if a party acquiring the additional voting shares was previously acquiring more than a 50% voting interest in the target corporation, a new notification will not be required. In addition, where an amendment is made such that an existing party acquires less than an additional 5% of the voting interests of the target, a new notification will not be required unless the additional acquisition will trigger the subsection 110(3) threshold (each of 20% and 50% for public corporations, or 35% and 50% for privately-held corporations or non-corporate entities).
  • Removal of an Asset or Party: This will not normally trigger the requirement for a new notification. However, if the removal of a party will result in an increase in the ownership interest of another purchaser, new notification may be required.

New ARC Requests

Generally speaking, the Bureau will require a new ARC request where an amendment to a proposed transaction will result in a different competitive effects analysis or will require a more in-depth analysis of the transaction. Factors that the Bureau will consider in this regard include:

  • Description of the proposed transaction and the parties;
  • Whether the complexity designation and the information required to commence the service standard for the amended transaction is different from the initial proposed transaction;
  • The relationship of an added party to the existing parties in the proposed transaction (e.g. affiliate, customer, supplier, or competitor);
  • Whether the existing ARC request contemplated the redistribution of assets or ownership interests among the parties, if any;
  • Where a new asset has been added, whether or not that asset is ancillary to the existing assets.

The Bureau has clarified that where a new notification is required in respect of an amended proposed transaction, the 30 day waiting period will begin to run from the date that the Commissioner receives the new notification. Furthermore, parties submitting a new notification will be required to pay the applicable filing fee, unless they have filed both a notification and an ARC request and the amendment to the transaction only requires one of them to be updated.

Interestingly, the draft Guideline seems to deal only with situations in which the Bureau's review continues, and does NOT address the situation in which an ARC has been issued, and the transaction subsequently changes prior to closing, and the question arises as to the continued validity of the ARC to the modified transaction.

Guideline # 14: Duplication Arising from Affiliate Transactions

The thresholds for notifiable transactions set out in sections 109 and 110 of the Act are measured by either the monetary value of the parties' assets in Canada or the gross revenues derived from sales "in, from, or into" Canada generated by the assets. Subparagraph 4(1)(a) and subsection 5(2) of the Notifiable Transactions Regulations provide that in determining the amounts under sections 109 and 100, any amount that represents duplication arising from transactions between affiliates shall be deducted.

The draft Interpretation Guideline No. 14 establishes that, in considering whether there is a duplication that may be deducted pursuant to the Regulation, the Bureau will consider the accounting principles normally used by the party (or its affiliates) as well as those that are generally accepted for the type of business carried on by that party or its affiliates.  Simply stated, the purpose of deducting duplicated amounts is to avoid double counting. When evaluating the party size or transaction size for determining whether the thresholds of the Act have been exceeded, subsection 5(2) of the Regulations provides the parties with the ability to deduct revenue from the sale of a product only if it duplicates an equivalent amount of revenue from another sale of that product that is already included in the party size or transaction size calculation.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.