On February 10, new thresholds for Canadian merger reviews under the Competition Act and Investment Canada Act came into effect.
What You Need To Know
- The threshold for merger notification under the Competition Act has increased from $88 million to $92 million for 2018.
- The 2018 threshold for reviews of direct investments by state-owned or influenced enterprises under the Investment Canada Act has increased from $379 million to $398 million.
Competition Act Thresholds
Pre-merger notification under Canada's Competition Act is generally required for transactions where the target has either assets in Canada or revenues in or from Canada generated from those assets of $92 million or more and where the parties to the transaction have Canadian assets in Canada or revenues from sales in, from or into Canada of $400 million or more. In some cases, additional share or partnership interest ownership levels must also be satisfied.
Investment Canada Act Thresholds
The Investment Canada Act generally requires that a non-Canadian investor proposing to acquire direct control of a Canadian business receive approval that the investment is of "net benefit" if enterprise value of the Canadian business exceeds at least $1 billion or $1.5 billion in the case of investors from the United States, European Union, and certain other countries. A lower threshold of $398 million, based on the book value assets of the Canadian business, applies to acquisitions by state-owned or influenced enterprises.
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