Notification and Clearance If a proposed transaction exceeds the notification thresholds and does not fall within a statutory exemption, parties may either give the requisite notice or obtain from the Commissioner an exemption from or a waiver of the notification obligation that also provides comfort that the Commissioner will not challenge the transaction. Depending on the extent to which a proposed Notifiable Transaction may raise potential competition issues, parties typically file a request for an Advance Ruling Certificate (ARC) or, alternatively, a no-action letter (NAL), either in lieu of or in addition to filing a formal notification with the Bureau. These types of filings are discussed below. Further, even if pre-notification is not mandatory, parties sometimes notify the Commissioner voluntarily to obtain greater certainty that the transaction will not be challenged, particularly in cases in which the proposed transaction may result in significant horizontal or vertical competitive overlaps. As noted above, the Commissioner can challenge any transaction for up to three years after closing. Regardless of the type of filing(s) made with the Bureau, a filing fee, currently $90,198.19, is payable for each transaction for which the parties request clearance and/or file a notification, regardless of the transaction size.
Apply for an Advance Ruling Certificate or a No-Action Letter Most commonly, to facilitate the Bureau’s review, parties file a submission or “white paper” analyzing the substantive competitive effects of the proposed transaction and requesting an ARC or a NAL, although such a request does not in itself trigger the start of a statutory waiting period. The filing of the submission may, however, trigger the application of the non-binding service standard periods discussed below. Such a submission typically addresses the degree of competitive overlap between the acquirer and the target, their respective market shares, other competitors in the market, potential for expansion or entry by other competitors, countervailing power of customers or suppliers, and other factors relevant to whether the proposed transaction is likely to result in higher prices or otherwise enhance market power in any market in Canada. An ARC is typically issued only for mergers with no or minimal competitive overlap between the parties. An ARC effectively precludes the Commissioner from challenging the transaction so long as the transaction is completed within one year. A NAL states that the Commissioner does not currently intend to make an application challenging the transaction (but reserves the right to do so for up to one year after closing). A NAL can also include a waiver of the notification requirement. Parties routinely close transactions in reliance on a NAL.
6
Davies | dwpv.com
Powered by FlippingBook