Competition Bureau publishes final Pre-Merger Notification Interpretation Guidelines Nos. 12 and 14

April 25, 2014 — OTTAWA, ON — Competition Bureau

Following a public consultation, the Competition Bureau today published final Pre-Merger Notification Interpretation Guidelines Nos. 12 and 14. These two guidelines, along with 12 other Pre-Merger Notification Interpretation Guidelines previously published by the Bureau, assist parties and their counsel in interpreting and applying the provisions of the Competition Act relating to notifiable transactions.

Concerns raised in the submissions received during the public consultation have been thoroughly considered and, where appropriate, addressed in the final guidelines.

Final Interpretation Guideline No. 12: Requirement to Submit a New Pre-Merger Notification and/or Advance Ruling Certificate Request Where a Proposed Transaction is Subsequently Amended describes common amendments to proposed transactions and discusses whether such amendments would typically require parties to file a new notification and/or request for an advance ruling certificate (ARC). This guideline was revised to generally require a new notification and/or ARC request when a new or existing party to a merger increases its ownership in the target by at least 10 percent — up from 5 percent in the draft guideline. The scope of new assets that can be added to a proposed transaction without requiring a new notification or ARC request has also been broadened.

Final Interpretation Guideline No. 14: Duplication Arising From Transactions Between Affiliates addresses the treatment of duplicative assets and sales revenue arising from transactions between affiliates when determining whether a proposed transaction exceeds the notification thresholds in the Act. This guideline was revised to better explain the difference between accounting duplication and notification duplication and to include more specific guidance on the situations where these two types of duplication are likely to vary most (i.e., transactions between a Canadian and a foreign affiliate).

Quick facts

  • In general, the Bureau must be given advance notice of proposed transactions when the assets in Canada or revenues of the target firm generated in or from Canada exceed $82 million, and when the combined Canadian assets or revenues of the parties and their respective affiliates in, from or into Canada exceed $400 million.
  • Guideline No. 12 provides guidance to parties where they have amended a proposed transaction as to whether they will be required to submit a new notification and/or ARC request.
  • Guideline No. 14 provides guidance to parties when calculating whether a proposed transaction exceeds the party-size and transaction-size thresholds. In particular, it clarifies what amounts may be deducted as a result of duplication arising from transactions between affiliates.

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