Determining Whether a Transaction Is Notifiable (Cont'd)
Step 2: Assess the Party-Size Threshold
Step 3: Evaluate Possible Exemptions A transaction that satisfies both of the above thresholds may not be subject to pre-merger notification if it falls within a statutory exemption. Do any of the exemptions below apply in respect of the proposed transaction? This is not an exhaustive list and other exemptions may be available. The Commissioner may also waive the requirement to pre-notify where satisfied that the proposed transaction is not likely to prevent or lessen competition substantially.
Do the parties to the transaction together with their affiliates collectively have either
(i) assets in Canada
or
(ii) gross revenues from sales in, from or into Canada in excess of $400 million? Gross revenues “in, from or into” Canada refers to domestic sales, export sales to a foreign jurisdiction and import sales from a foreign jurisdiction.
1. Transaction Among Affiliates
An acquisition is exempt if all parties to the transaction are affiliates of each other. (For this purpose, the “parties” to a share acquisition are the acquirer of the shares and the corporation whose shares are to be acquired.)
2. Acquisition of Real Property or Goods in the Ordinary Course of Business
An acquisition of real property or goods in the ordinary course of business is exempt if the purchaser would not, as a result of the acquisition, hold all or substantially all of the assets of a business or of an operating segment of a business. The Bureau considers that certain intangible assets such as loans, mortgages and receivables may be “goods” for the purpose of this exemption. Guidance from the Bureau takes the position that, in some cases, each location of a company’s business may be viewed as a business or an operating segment of a business.
If the proposed transaction exceeds the party-size threshold, it is notifiable subject to any exemption or waiver that may apply. Proceed to Step 3 .
If not, pre-merger notification is not mandatory.
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