CANADA: Template for merger consent agreements published

Friday September 30 2016

The Competition Bureau of Canada has published a template for merger consent agreements. The formal guidance is designed to provide the Canadian legal and business community with better insight into the Bureau’s expectations when negotiating measures to address competitive issues likely to arise from a proposed merger. It will also support transparency and predictability in how the Bureau enforces the Competition Act.

A consent agreement will contain remedial measures that the Commissioner has determined are appropriate to address a proposed transaction’s likely anti competitive effects. A consent agreement has the force and effect of a court order once it is registered with the Competition Tribunal.

When the Bureau finds that a transaction is likely to have anticompetitive effects, its preference is to negotiate a consent agreement rather than challenge a transaction before the courts.

However, the Bureau has indicated they will preserve competition in the marketplace through contested proceedings, if necessary and in 2015, applied for two Competition Tribunal orders under section 92 of the Competition Act challenging the proposed transactions.
Summary Facts:

• The consent agreement template will be adjusted over time;
• By signing a consent agreement, parties to a merger agree to implement the actions described in the document to remedy the likely anti-competitive effects of the merger;
• Once a consent agreement is registered with the Competition Tribunal, the Commissioner issues a No Action Letter, if requested, confirming he will not be challenging the transaction at that time.

Please click the link at the top of the page for the official announcement