Copyright 2012, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, January 2012

On January 11, 2012, the Canadian Competition Bureau (Bureau) revised its Merger Review Process Guidelines (Guidelines). The Bureau first published these Guidelines in 2009 after Parliament amended the Competition Act (Act) to introduce the supplementary information request (SIR) process, thereby implementing a two-stage merger review in Canada.

The Bureau can issue an SIR to parties to a proposed transaction when their transaction exceeds the pre-merger notification thresholds set out at Part IX of the Act. Parties subject to Part IX are prohibited from completing the transaction until the expiry or waiver of an initial 30-day waiting period. When, however, the Bureau issues an SIR, absent Bureau clearance the parties are prohibited from completing the transaction until 30 days after they have complied with the SIR (in the case of a hostile transaction, timing is governed by the bidder's compliance with the SIR).

The new Guidelines largely formalize the Bureau's recent practices in respect of the information-gathering processes used during merger review, particularly the SIR process. The changes also appear to signal that the Bureau may intend to issue SIRs with greater frequency.

Among other changes in the revised Guidelines, the Bureau:

  • no longer commits to communicating preliminary views as soon as reasonably possible, and now focuses instead on whether it can obviate the need for an SIR in a particular case;
  • modifies the parameters for consultation both before and after an SIR is issued (pre- and post-merger dialogue) by focusing largely on identifying the sources of information at the pre-issuance stage, while leaving discussion of the terms of production (i.e., prioritizing certain questions, custodians and information) to the post-issuance stage;
  • standardizes the practice of imposing a continuing production or "refresh" requirement (typically, at 30 and 90 days from the date of issuance of the SIR);
  • clarifies the circumstances when timing agreements may be used as an alternative to an SIR (e.g., more appropriate where the transaction does not meet the pre-merger notification thresholds under Part IX);
  • confirms that it will no longer commit to a date for completing its review of a transaction under a timing agreement; and
  • elaborates on its approach to information-gathering in the context of a hostile transaction by (i) explaining that the Bureau will issue an SIR to the target coupled with a timing agreement or section 11 court order to obtain information relevant to its assessment of a proposed transaction, and (ii) reiterating the position in its Hostile Transactions Interpretation Guideline Number 2 that where the transaction is no longer hostile at the time the bidder certifies completeness with its SIR, the second, 30-day waiting period will not commence unless and until the target certifies completeness with its SIR.

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