Archive for the 'Mergers' Category
On April 10, 2012, the Competition Bureau issued a statement summarizing its review of the acquisition of Quad/Graphics Canada, Inc. by Transcontinental Inc. (a printing merger involving the retail flyer market).
The Bureau’s announcement is part of its recent initiative to increase the transparency of its merger review process, which has included the launch of a new Monthly Report of Concluded Merger Reviews (launched earlier this year with some controversy from the competition bar), new Merger Enforcement Guidelines (“MEGs”) (which govern the Bureau’s substantive review of mergers in Canada), new Merger Review Process Guidelines (reflecting the Bureau’s experience with Canada’s new two-stage merger review process since it was introduced in March, 2009) and recent public remarks by the Commissioner.
With respect to merger review summaries in particular, the Commissioner announced that the Bureau would be launching summaries of some of its merger reviews in recent public remarks:
“Among other initiatives, I am pleased to announce that, following the recommendations of an internal working group on transparency, we intend to publish more position statements that describe the Bureau’s analysis of complex merger cases, and to establish a merger register — a list of all closed merger reviews, updated on a monthly basis.”
While the Bureau had previously been issuing Technical Backgrounders for completed merger reviews, the Bureau discontinued that practice in 2009.
In the Bureau’s Quad/Graphics-Transcontinental merger review statement, the Bureau states that it issued a No Action Letter (“NAL”) to Transcontinental, based on factors including increased foreign (U.S.) competition in the relevant retail flyer market.
According to the Bureau, while it concluded that there was increased concentration in Canada, “U.S. printers with printing facilities located in close proximity to the Canadian border … are imposing competitive discipline on the retail flyer market in Canada.”
The National Competition Law Section of the Canadian Bar Association is holding its 2012 Spring competition law conference in Toronto (the 2012 Competition Law Spring Forum: Best Practices in a Time of Active Enforcement) on May 2, 2012 at the Toronto Board of Trade.
From the CBA:
“Aided by the 2009/10 changes to the Competition Act, the Canadian Competition Bureau has adopted an aggressive enforcement agenda. There are more litigated cases in the Tribunal and the Courts than ever before, including the first prosecution under the new conspiracy provisions of the Act. Commissioner Melanie Aitken has made it clear that there are more to come. Our expert panelists will provide guidance on effectively protecting your clients’ interests at all stages – from preventative compliance programs to responding to criminal or civil enforcement actions. We are delighted to announce that Commissioner Melanie Aitken will be our keynote lunchtime speaker.”
This year’s Spring conference will include panels on compliance, responding to Competition Bureau investigations, misleading advertising, developments in merger review and recent competition law developments (including the TREB abuse case, the contested Air Canada / United merger, Bell Canada advertising case and recent bid-rigging cases).
Earlier today, the Wall Street Journal and others reported that the Quebec Securities Commission said that it intends to approve the proposed acquisition of the TMX by the Maple Group (see: Quebec Regulator Gives Nod to Maple/TMX Deal).
The Competition Bureau, however, was reported by the Montreal Gazette and others today to have repeated its concerns about the proposed transaction:
“A spokeswoman for the federal antitrust watchdog said there were no new developments to report regarding its continuing review of the proposed deal.
‘As we said in November, while it is accurate to say the commissioner’s views may be affected by further factual information and developments, a significant and material change to the competitive consequences to the proposed transaction would be required to sufficiently address the commissioner’s serious concerns communicated to the parties in November,’ spokesperson Alexa Keating said.”
On increasing speculation about potential bidders for Viterra, the company issued a short press release earlier today. In its release, Viterra said:
“Viterra Inc. … at the request of Market Surveillance on behalf of the Toronto Stock Exchange, acknowledges that, in response to expressions of interest from third parties to acquire the Company, a process has been established by the Board of Directors of Viterra, which includes confidentiality agreements being entered into and the provision of due diligence.
Viterra is aware of press reports speculating about, among other things, the process, parties involved and third parties expressions of interest of at least Cdn$16 per Viterra common share. Viterra cautions investors not to rely on these press reports as there can be no assurance that a transaction will occur and that if one does occur, there can be no assurance at what price it will be completed.
Viterra has engaged financial and legal advisors to provide support with this process.
A further announcement will be made if appropriate.”
Jeff Gray and Tara Perkins at the Globe have written an interesting note on criticism of the Competition Bureau’s recently launched merger registry (see: Competition Bureau’s Mergers List Panned).
For the first transactions disclosed by the Bureau in its new merger registry see: Monthly Report of Concluded Merger Reviews. For more about Canadian merger control see: Merger Control. For the Canadian Bar Association’s comments on the proposed registry last fall see: Proposed Merger Registry.
The International Antitrust Law Committee of the ABA has published their March 2012 “Hot Topics” Newsletter entitled “Updates to the Canadian Merger Review Process” (see: Updates to the Canadian Merger Review Process).
Abstract:
“On January 11, 2012, the Canadian Competition Bureau published a revision of its Merger Review Process Guidelines. The revised Guidelines set out the Bureau’s approach to the merger review process under the Competition Act, which was most recently articulated in 2009 following the significant changes to the merger notification provisions which conform more closely to the ‘second request’ system employed in the United States.
The revised Guidelines represent refinements rather than wholesale changes to the process articulated in 2009, and are principally concerned with the procedures to be followed when responding to a Supplementary Information Request (‘SIR’)”
Bloomberg, the Wall Street Journal, the Globe and Mail and others are reporting that Glencore International Plc has made a £3.5 billion ($5.5 billion) bid for Viterra Inc., Canada’s largest grain handler (see e.g.: Glencore in $5.49 Billion Bid for Viterra Telegraph Says).
In reporting this story, Bloomberg said:
“Buying Viterra would give Glencore the largest share of the Canadian grain-handling market just as the Canadian Wheat Board’s monopoly over wheat and barley grown in the west of the country comes to an end. Viterra’s share of Canadian grain- handling may rise to almost 50 percent in the next few years from 45 percent, its Chief Executive Officer Mayo Schmidt said in an interview on March 8.
Viterra said in January it expects to increase grain volumes and earnings after the board’s control of supplies ends. The Canadian government passed a law in December that will end the monopoly and give farmers the choice to sell to other buyers as of Aug. 1.
A deal with Glencore might also help the company’s agricultural business to return to profit after a “difficult year” said Fairfax’s Meyer. Moving into storage of wheat and other logistics beyond just trading grains would likely help boost their margins, he said.
Glencore said Feb. 7 that 2011 adjusted earnings before interest and tax from its agricultural trading unit swung to an $8 million loss from a $659 million profit a year earlier after experiencing an ‘unprecedented cotton market.’”
For more media reports see: WSJ – Glencore, Cargill Looking at Viterra, The Australian – Cargill joins Glencore in circling Viterra, sale process expected, Globe and Mail – Glencore reportedly Viterra suitor
On March 6, 2012, a Scheduling Order was issued in Commissioner of Competition v. Air Canada/United, one of two current contested merger cases before the Competition Tribunal.
Hearings are scheduled to begin November 13, 2012.
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
