Canada and the United States have one of the most significant
cross-border investment relationships in the world. Robust M&A
activity continues to expand between Canada and the U.S., both
north bound and south bound. While Canada is heavily influenced by
transaction activity, jurisprudence and trends in the U.S., there
are important distinctions. M&A practices in North America have
converged to a degree, but disparities between market terms on both
sides of the Canada-U.S. border continue to exist. This is
reinforced by the recent release of the American Bar
Association's 2015 Canadian Public Target Mergers &
Acquisitions Deal Points Study which analyzed 88 Canadian
transactions with a value of C$50+ million announced in 2013 and
2014.1 This study is the second of its kind issued by
the ABA, focussing on the acquisition of Canadian public targets.
Below we identify some of the important differences between
Canadian M&A transactions and the comparable U.S. M&A
transactions analyzed as part of the ABA's 2015 U.S. Strategic
Buyer/Public Target Mergers & Acquisitions Deal Points Study
for transactions announced in 2014:
Representations & Warranties Included
No undisclosed liabilities – all
No undisclosed liabilities – only
GAAP liabilities covered
Compliance with law – no time
Compliance with law – date
Compliance with law - current
Availability of financing
Appraisal rights – cash only
Appraisal rights – cash/shares
No Shop -
Actual superior proposal
May reasonably lead to superior proposal
Proposal Definition - Assets
All or substantially all
> 50% but < all
Proposal Definition - Shares
All or substantially all
> 50% but < all
5 business days or more
4 business days
3 business days
Naked no vote/
Acquisition proposal & no vote
Acquisition proposal & outside
Change in Board recommendation
Characterized as liquidated damages
Covenant to Operate in Ordinary Course
Consistent with past practice
Insurance – Premium Caps
1 We were pleased to once again participate in the Canadian
Study, with Cyndi Laval serving as Vice-Chair, Stephen McKersie
serving as an Issue Group Leader and Ian Palm and Kathleen Ritchie
serving on the Working Group.
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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