Competition Act (R.S.C., 1985, c. C-34)

Act current to 2016-08-15 and last amended on 2015-03-09. Previous Versions

Mergers

Definition of merger

 In sections 92 to 100, merger means the acquisition or establishment, direct or indirect, by one or more persons, whether by purchase or lease of shares or assets, by amalgamation or by combination or otherwise, of control over or significant interest in the whole or a part of a business of a competitor, supplier, customer or other person.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45.
Marginal note:Order
  •  (1) Where, on application by the Commissioner, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially

    • (a) in a trade, industry or profession,

    • (b) among the sources from which a trade, industry or profession obtains a product,

    • (c) among the outlets through which a trade, industry or profession disposes of a product, or

    • (d) otherwise than as described in paragraphs (a) to (c),

    the Tribunal may, subject to sections 94 to 96,

    • (e) in the case of a completed merger, order any party to the merger or any other person

      • (i) to dissolve the merger in such manner as the Tribunal directs,

      • (ii) to dispose of assets or shares designated by the Tribunal in such manner as the Tribunal directs, or

      • (iii) in addition to or in lieu of the action referred to in subparagraph (i) or (ii), with the consent of the person against whom the order is directed and the Commissioner, to take any other action, or

    • (f) in the case of a proposed merger, make an order directed against any party to the proposed merger or any other person

      • (i) ordering the person against whom the order is directed not to proceed with the merger,

      • (ii) ordering the person against whom the order is directed not to proceed with a part of the merger, or

      • (iii) in addition to or in lieu of the order referred to in subparagraph (ii), either or both

        • (A) prohibiting the person against whom the order is directed, should the merger or part thereof be completed, from doing any act or thing the prohibition of which the Tribunal determines to be necessary to ensure that the merger or part thereof does not prevent or lessen competition substantially, or

        • (B) with the consent of the person against whom the order is directed and the Commissioner, ordering the person to take any other action.

  • Marginal note:Evidence

    (2) For the purpose of this section, the Tribunal shall not find that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially solely on the basis of evidence of concentration or market share.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45;
  • 1999, c. 2, s. 37.
Marginal note:Factors to be considered regarding prevention or lessening of competition

 In determining, for the purpose of section 92, whether or not a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially, the Tribunal may have regard to the following factors:

  • (a) the extent to which foreign products or foreign competitors provide or are likely to provide effective competition to the businesses of the parties to the merger or proposed merger;

  • (b) whether the business, or a part of the business, of a party to the merger or proposed merger has failed or is likely to fail;

  • (c) the extent to which acceptable substitutes for products supplied by the parties to the merger or proposed merger are or are likely to be available;

  • (d) any barriers to entry into a market, including

    • (i) tariff and non-tariff barriers to international trade,

    • (ii) interprovincial barriers to trade, and

    • (iii) regulatory control over entry,

    and any effect of the merger or proposed merger on such barriers;

  • (e) the extent to which effective competition remains or would remain in a market that is or would be affected by the merger or proposed merger;

  • (f) any likelihood that the merger or proposed merger will or would result in the removal of a vigorous and effective competitor;

  • (g) the nature and extent of change and innovation in a relevant market; and

  • (h) any other factor that is relevant to competition in a market that is or would be affected by the merger or proposed merger.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45.
Marginal note:Exception

 The Tribunal shall not make an order under section 92 in respect of

  • (a) a merger substantially completed before the coming into force of this section;

  • (b) a merger or proposed merger under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act in respect of which the Minister of Finance has certified to the Commissioner the names of the parties and that the merger is in the public interest — or that it would be in the public interest, taking into account any terms and conditions that may be imposed under those Acts; or

  • (c) a merger or proposed merger approved under subsection 53.2(7) of the Canada Transportation Act and in respect of which the Minister of Transport has certified to the Commissioner the names of the parties.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45;
  • 1991, c. 45, s. 549, c. 46, ss. 592, 593, c. 47, s. 716;
  • 1999, c. 2, s. 37;
  • 2000, c. 15, s. 14;
  • 2001, c. 9, s. 579;
  • 2007, c. 19, s. 62.
Marginal note:Exception for joint ventures
  •  (1) The Tribunal shall not make an order under section 92 in respect of a combination formed or proposed to be formed, otherwise than through a corporation, to undertake a specific project or a program of research and development if

    • (a) a project or program of that nature

      • (i) would not have taken place or be likely to take place in the absence of the combination, or

      • (ii) would not reasonably have taken place or reasonably be likely to take place in the absence of the combination because of the risks involved in relation to the project or program and the business to which it relates;

    • (b) no change in control over any party to the combination resulted or would result from the combination;

    • (c) all the persons who formed the combination are parties to an agreement in writing that imposes on one or more of them an obligation to contribute assets and governs a continuing relationship between those parties;

    • (d) the agreement referred to in paragraph (c) restricts the range of activities that may be carried on pursuant to the combination, and provides that the agreement terminates on the completion of the project or program; and

    • (e) the combination does not prevent or lessen or is not likely to prevent or lessen competition except to the extent reasonably required to undertake and complete the project or program.

  • Marginal note:Limitation

    (2) For greater certainty, this section does not apply in respect of the acquisition of assets of a combination.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45.
Marginal note:Exception where gains in efficiency
  •  (1) The Tribunal shall not make an order under section 92 if it finds that the merger or proposed merger in respect of which the application is made has brought about or is likely to bring about gains in efficiency that will be greater than, and will offset, the effects of any prevention or lessening of competition that will result or is likely to result from the merger or proposed merger and that the gains in efficiency would not likely be attained if the order were made.

  • Marginal note:Factors to be considered

    (2) In considering whether a merger or proposed merger is likely to bring about gains in efficiency described in subsection (1), the Tribunal shall consider whether such gains will result in

    • (a) a significant increase in the real value of exports; or

    • (b) a significant substitution of domestic products for imported products.

  • Marginal note:Restriction

    (3) For the purposes of this section, the Tribunal shall not find that a merger or proposed merger has brought about or is likely to bring about gains in efficiency by reason only of a redistribution of income between two or more persons.

  • R.S., 1985, c. 19 (2nd Supp.), s. 45.
 
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