The Competition Bureau announced on January 8, 2013
that the "transaction size" threshold for review of
acquisitions under the Competition Act will increase from
the 2012 threshold of CDN$77 million to CDN$80 million. The 2013
threshold is anticipated to come into effect on or about January
The transaction-size threshold is based on the book value of
assets in Canada of the target (or in the case of assets, of the
assets in Canada being acquired), or the gross revenues from sales
"in or from" Canada generated by those assets, calculated
in accordance with the Notifiable Transactions
Regulations under the Competition
Act. The Competition Act threshold
is indexed annually to account for inflation. The "size of
parties" threshold remains constant at CDN$400 million.
Once implemented, the Competition Bureau must generally be given
advance notice of proposed transactions when the acquired assets in
Canada or revenues generated in or from Canada exceed $80 million,
and when the combined Canadian assets or revenues "in, from or
into" Canada of the parties together with their respective
affiliates exceed $400 million. Transactions involving Canadian
subsidiaries, as well as the direct acquisition of Canadian
businesses or assets, and shareholdings as little as 20% (for
public companies) or 35% (private companies and interests in
non-corporate business combinations) can trigger merger
notifications in Canada.
The threshold for advance review and Ministerial approval of
certain direct foreign acquisitions of control of Canadian
businesses under the Investment Canada Act is typically
increased in January of each year. According to Industry Canada, it
is expected that the amount will
increase from CDN$330 million to CDN$344 million dollars for 2013
for investments by WTO members. The official amount will be
published in early 2013.
Direct acquisitions of control of Canadian businesses with
cultural activities, and direct acquisitions of control of
non-cultural Canadian businesses where neither the sellers nor
purchasers are from WTO member states, are still subject to a
review threshold of CDN$5 million. Indirect acquisitions of control
of non-cultural Canadian businesses (pursuant to the acquisition of
control of their non-Canadian parents) are not subject to review
for WTO investors, regardless of the size of the assets of the
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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