Canadian Merger Law And Interlocking Directorships/ Minority Shareholdings

The Canadian Competition Bureau ("Bureau") is currently examining its policies regarding merger reviews that involve minority shareholdings and interlocking directorships. Although this review is not complete, the Bureau recently set out some of its developing views in a report prepared for the OECD.

Preliminary Observations

A few preliminary observations are in order. First, the Competition Act does not contain any express provision dealing with interlocking directorships. This is different from the United States, where section 8 of the Clayton Act prohibits a person from serving as a director, or a board-appointed officer, of two or more competing corporations (subject to certain materiality thresholds). In Canada, for an interlocking directorship to be subject to independent merger review, it must qualify as a "merger" as defined in the Competition Act, i.e., it must be found to result in the