Competition Bureau publishes revised Pre-Merger Notification Interpretation Guideline No. 7
October 27, 2017 – OTTAWA, ON – Competition Bureau
The Competition Bureau today published revisions to its Pre-Merger Notification Interpretation Guideline No. 7. This guideline, along with 14 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 that are relevant to determining whether a transaction is subject to mandatory pre-merger notification.
Interpretation Guideline No. 7: Creditor Acquisitions (Subsection 108(1) and Paragraph 111(d) of the Act)revises the previous Interpretation Guideline No. 7 to clarify that the exemption from notification provided by paragraph 111(d) of the Competition Act, may in certain circumstances extend to acquisitions following the transfer of a creditor’s interest (e.g. on secondary markets), provided the acquisition is pursuant to a credit transaction entered into in good faith in the ordinary course of business. The guideline was also updated to provide greater clarity regarding the need to consider whether a business acquired further to an insolvency proceeding may be an “operating business” under subsection 108(1) of the Competition Act and, as a result, may be subject to notification requirements under Part IX of the Competition Act.
In general, the Bureau must be given advance notice of proposed transactions when the target's assets in Canada or revenues from sales in or from Canada generated from those assets exceed $88 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. 7 provides guidance regarding the interpretation of the definition of “operating business” under subsection 108(1) of the Competition Act and the application of paragraph 111(d) of the Competition Act in relation to certain common circumstances arising from creditor acquisitions. Paragraph 111(d) exempts a class of acquisitions by creditors from the pre-merger notification requirements of Part IX of the Competition Act.
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