Competition and Antitrust Bulletin
New Canadian Merger Notification and Foreign Investment Review Thresholds
February 8, 2012
By Jay Holsten, Omar Wakil and Damien Liddle
Competition Act
On February 7, 2012, the Competition Bureau announced its annual revision to the merger notification thresholds in Part IX of the Competition Act.
Under the Act, pre-merger notification is generally required for mergers and acquisitions that exceed "transaction-size" and "party-size" thresholds.
Effective February 11, 2012, the value of the Canadian assets or revenues of the target, required to trip the transaction-size threshold, will increase to $77 million, from $73 million. The party-size threshold, which reflects the value of the Canadian assets or revenues of the parties to the transaction and their affiliates, remains unchanged at $400 million.
Investment Canada Act
Separately, the Investment Review Division of Industry Canada announced in January 2012 that the principal threshold for reviews under the Investment Canada Act will increase to $330 million, from $312 million, retroactively effective to January 1, 2012. The Minister of Industry is expected to confirm the adjustment shortly.
Generally, the acquisition of the shares or assets of a Canadian corporation by WTO investors are subject to pre-closing review and approval if the Canadian business has assets with a book value in excess of $312 million (shortly to increase to $330 million). The acquisition of control of a Canadian cultural business is generally reviewable if its book value assets are $5 million or more. Amendments to the Investment Canada Act that were introduced in 2009 to replace the asset value review threshold with a threshold based on the enterprise value of the target business have not yet entered into force. 