On May 31, 2010, the Competition Bureau issued its new Merger Review Performance Report (the “Merger Report”). The Bureau’s new Merger Report provides an update on the performance of the Bureau’s Mergers Branch since its last report was issued in 2007. Some of the highlights of the Bureau’s new Merger Report include the following:
New merger enforcement guidelines. The Bureau has issued new Merger Review Process Guidelines, a new draft Fee and Service Standards Handbook for Merger-Related Matters (see post below) and the Bureau’s Procedures Guide for Notifiable Transactions and Advance Ruling Certificates under the Competition Act has also been updated by the Bureau and is to be issued shortly.
Number of merger notification and Advance Ruling Certificate filings. The number of merger notification filings and Advance Ruling Certificate requests since 2007 has been as follows: (i) 2007-2008 (15 / 294), (ii) 2008-2009 (12 / 195) and (iii) 2009-2010 (10 / 190). According to the Bureau, while there was a significant increase in the number of mergers it reviewed between 2003 and 2008, the 2008-2009 recession had an adverse impact on the number of transactions reviewed during that period as well as in 2009-2010.
Increase in complex transactions. According to the Bureau, while the overall number of notifiable transactions was lower in the past two years than in previous years, the number of transactions “raising serious competition concerns” has increased. In this regard, during 2009-2010 six merger-related consent agreements were registered with the Competition Tribunal (Suncor/Petro-Canada as well as mergers in the pharmaceutical products, fertilizer products, ticketing services and solid hazardous waste disposal services industries).
New Notifiable Transactions Regulations. The Bureau notes that, following the signficant amendments to the Competition Actin 2009, paragraph 16(1)(d) of the Notifiable Transactions Regulations has been amended to reflect the new pre-merger notification filing requirements under the amended Act.
Merger Remedies Study. The Bureau states that it is currently in the process of finalizing its Merger Remedies Study (which involved a review of 50 merger cases between 1986 and 2005 where at least part of a merger remedy was implemented).
Bulletin on Efficiencies in Merger Review. The Bureau has published its Bulletin on Efficiencies in Merger Review as a supplement to its existing Merger Enforcement Guidelines.
Technical Backgrounders. In April, 2005, the Bureau published a Policy Statement for the Publication of Technical Backgrounders. This Policy Statement sets out the Bureau’s use of technical backgrounders to increase transparency for merger review. (The Bureau’s technical backgrounders, which have been relatively recently adopted by the Bureau, describe the Bureau’s analysis in relation to particular merger reviews.) Since the Bureau’s last Performance Report, the Bureau has issued five merger-related technical backgrounders (Superior Plus/Irving Oil and Irving Oil Marketing, TSX Group Inc./Bourse de Montreal Inc., Organon BioSciences N.V./Schering-Plough Corporation, BMG/CHUM and Abitibi-Consolidated Inc./Bowater Incorporated).
Increase in very complex strategic mergers. According to the Bureau, since the recent amendments to the Competition Act, there have been an “unusually high number of very complex, strategic mergers.” In particular, the Bureau’s Mergers Branch registered six merger related consent agreements with the Competition Tribunal in less than seven months.
Volume of merger cases by complexity. According to the Bureau, the number of non-complex, complex and very complex merger cases between 2007 and 2010 were as follows: (i) 2007-2008 (279 / 23 / 4), (ii) 2008-2009 (180 / 23 / 5) and 2009-2010 (173 / 27 / 6). The Bureau also states that between 2003 and 2010, on average 88% of proposed mergers were classified as non-complex, 10% were classified as complex and 2% were classified as very complex.
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