INVESTIGATORY POWERS AND REMEDIES – The Commissioner has extensive investigatory powers (e.g., compulsory information requests and/or interviews), and has used them with increasing frequency in recent years. – The most common remedy for a challenged merger is a consent agreement negotiated between the Commissioner and the parties to the transaction. – Remedies the Commissioner may seek from the Competition Tribunal (a specialized adjudicative body for competition matters) include injunctions to prevent or delay closing, and post-closing divestitures or dissolution. A decision of the Competition Tribunal in a fully contested merger challenge may take over seven months from the Commissioner’s application for a remedial order. – Only the Commissioner may challenge a transaction under the merger provisions of the Competition Act . HOSTILE BIDS – Competition law can be a shield if an unsolicited bidder is a significant competitor or is likely to become one in the absence of the merger. – Pre-merger notification by the bidder triggers a similar filing requirement for the target. The Commissioner is required to immediately notify the target that a filing has been made. The target then has 10 days to provide pre-merger notification information to the Bureau. The target’s response time does not affect the running of the statutory waiting period, which still begins when the bidder files a complete notification. CAUTION IS WARRANTED IN DOCUMENT PREPARATION – The Commissioner will often request or compel parties to a merger to provide documents created or obtained by the parties or the parties’ respective advisors (e.g., confidential information memoranda, board presentations, internal strategic plans and emails) that can then be used in the Bureau’s analysis or as evidence in a challenge. The following guidelines can help to avoid raising unfounded competition concerns by giving inaccurate impressions in documents and correspondence: > Avoid using potentially misleading phrases such as “barriers to entry” and “dominant position.” Better phrases may include discussions of “competitive advantages,” “efficiencies” and “leading positions.” > Avoid using the word “market” in favour of terms such as “business,” “segment” or “industry.” > Avoid speculating on possible “competition law” or “antitrust” problems or potential divestiture scenarios to address such problems.
38
Canadian Mergers & Acquisitions
Powered by FlippingBook