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Merger Intelligence and Notification Unit – Update on Key Statistics 2019‑2020

Note: The statistics and views provided in this document were compiled by the Competition Bureau's Merger Intelligence and Notification Unit for the 2019-2020 fiscal year. They are not representative of the Bureau's performance data as a whole. For comprehensive performance data see the Bureau's Performance Measurement & Statistics Report 2019-20.

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Introduction

This document summarizes the number and characteristics of merger reviews started and concluded by the Competition Bureau's Mergers Directorate in the 2019-2020 fiscal year. In past years, the Merger Intelligence and Notification Unit (MINU) has presented similar information at the Mergers Roundtable hosted by the Canadian Bar Association's Mergers Committee and the Bureau's Mergers Directorate.

Annual Filings and Reviews Started

Figure I: Total Annual Notification & ARC Request Filings

  • Figure I: Total Annual Notification & ARC Request Filings
    Total Annual Notification & ARC Request Filings
    Year Total Filings
    2010-2011 219
    2011-2012 207
    2012-2013 214
    2013-2014 217
    2014-2015 240
    2015-2016 212
    2016-2017 217
    2017-2018 229
    2018-2019 197
    2019-2020 230

Figure I identifies the annual number of filings (including pre-merger notifications and requests for an Advance Ruling Certificate (ARC)) since 2010-2011. The number of filings in 2019-2020 was 230, which represents an increase of 17% over the previous fiscal year. In total, the Bureau started 243 reviews in 2019-2020, including 13 reviews with an origin of "Other"Footnote 1.

Figure II: 2019-2020 Monthly and Quarterly Notification & ARC Request Filings

  • Figure II: 2019-2020 Monthly and Quarterly Notification & ARC Request Filings
    2019-2020 Monthly and Quarterly Notification & ARC Request Filings
    Quarter Month Filings per month
    Q1=58
    Apr 18
    May 20
    Jun 20
    Q2=62
    Jul 23
    Aug 21
    Sept 18
    Q3=60
    Oct 14
    Nov 26
    Dec 20
    Q4=50
    Jan  22
    Feb  13
    Mar 15

Figure II identifies the number of filings in each month and quarter for 2019-2020. The number of filings was relatively stable between quarters in 2019-2020. The number of filings in each quarter of 2019-2020 was higher than the equivalent quarter in the previous year.

Case Load – Concluded Reviews Statistics

Table I: Complexity and Service StandardsFootnote 2 for Concluded Reviews
Measurement Complexity 2019‑20 2018‑19 2017‑18
Number of reviews concluded Non-Complex 168 142 161
Complex 57 67 70
Total 225 209 231
Percentage of reviews concluded Non-Complex 75% 68% 70%
Complex 25% 32% 30%
Total 100% 100% 100%
Number of reviews where the service standard was met Non-Complex 165 142 155
Complex 53 61 60
Total 218 203 215
Percentage of reviews where the service standard was met Non-Complex 98% 100% 96%
Complex 93% 91% 86%
Combined 97% 97% 93%
Average review length (days) Non-Complex 10.93 10.35 10.62
Complex 36.18 40.69 53.48

Table I sets out reviews concluded in 2019-2020 and the two previous fiscal years. It includes breakdowns by complexity and whether the Bureau met its service standards. The Bureau met its service standard in 98% of non-complex and 93% of complex reviews. The percentage of service standards met for all reviews remained consistent year over year at 97%. Average non-complex reviews lasted 10.93 days, while the average complex review lasted 36.18 days. The average length of reviews for complex reviews has decreased consistently since 2017-2018.

Figure III: 2019-2020 Completed Reviews Sector Breakdown

  • Figure III: 2019-2020 Completed Reviews Sector Breakdown
    2019-2020 Completed Reviews Sector Breakdown
    North American Industry Classification System (NAICS) BREAKDOWN
    Other 49%
    Lessors of Real Estate  23%
    Oil and Gas Extraction  6%
    Electric Power Generation, Transmission and Distribution  5%
    Metal Ore Mining 4%
    Software Publishers 3%
    Depository Credit Intermediation 3%
    Insurance Carriers 2%
    Other specialty trade contractors 2%
    Meat Product Manufacturing 2%
    Basic Chemical Manifacturing 2%
    Computer systems design and related services 2%

The Mergers Directorate assigns a four-digit North American Industry Classification System (NAICS) to each merger it reviews according to the industry sector involved. Figure III represents the sectors most frequently reviewed by the Mergers Directorate in 2019-2020. That year, the most frequently reviewed sector was Lessors of Real Estate, which made up approximately 23% of completed reviews. In 2018-2019 this sector represented 11% of completed reviews. In 2018-2019 the most frequently reviewed sector was Upstream Oil & Gas, which represented 13% of completed reviews in 2018-2019, and 6% in 2019-2020.

Table II: Case Load – Outcomes
Statistic 2019‑20 2018‑19 2017‑18 2016‑17
ARCs Issued in non-complex concluded reviews 103 91 89 115  
Percentage of non-complex concluded reviews in which the Bureau issued ARCs 61.3% 64.1% 55.3% 68.0%
No action letters (NALs) issued in non-complex concluded reviews 64 49 72 54
Percentage of non-complex concluded reviews in which the Bureau issued NALs 38.1% 34.5% 44.7% 32.0%
Supplementary Information Requests (SIRs) issued in concluded and ongoing reviews 13 10 10 21
SIRs issued in concluded reviews 9 13 13 -
Percentage of total concluded matters filed in which the Bureau issued SIRs 4.0% 6.2% 5.6% -
Reviews Concluded with IssuesFootnote 3 5 5 7 9
Consent Agreements issued 2 5 6 8
Position Statements issued 3 6 7 17

Table II sets out the outcomes for concluded reviews in 2019-2020, as well as in the three prior fiscal years. In 2019-2020, the Bureau issued 13 SIRs. SIRs were issued in nine of the reviews that concluded in 2019-2020. Five reviews were concluded with issues in 2019-2020, which is consistent with the previous fiscal year. The Mergers Directorate issued three position statements in 2019-2020, and also published a Report to the Minister of Transport and the parties to the transaction pursuant to subsection 53.2(2) of the Canada Transportation Act.

Update on Merger Intelligence Work

As announced September 2019, the MINU continues its increased focus on intelligence gathering. In the first year since the expansion of its role, the MINU has collected valuable data, and has experienced an increase in engagement from a variety of stakeholders.

The MINU's intelligence work has led to a number of reviews of non-notifiable transactions that were potentially concerning and where there was no evidence that the parties intended to engage with the Bureau prior to closing. In particular, the MINU became aware of the acquisition of PeroxyChem Holding Company LLC by Evonik Industries AG. The Bureau's review of this transaction ultimately led to a Consent Agreement filed with the Competition Tribunal in January 2020, requiring the divestiture of assets in British Columbia to remedy competition concerns.

The MINU continues to refine its information-gathering sources and processes. To date, its intelligence gathering has been a valuable source of information on non-notifiable transactions in Canada and a catalyst for increased stakeholder engagement across a variety of industries.

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