New Decision On Merger Efficiencies Defence And Prevention Of Competition Standard

On February 25, 2013, the reasons for the decision of the Federal Court of Appeal (FCA) in Tervita Corporation v. Commissioner of Competition were made public. The decision provides the first Canadian jurisprudence on merger efficiencies and the law on the "prevention" of competition in over a decade. While the FCA upheld the Competition Tribunal's (Tribunal) finding that the transaction prevented competition substantially and its accompanying divestiture order, the Court made three important clarifications.

First, the FCA confirmed that the efficiencies analysis is the hallmark of merger review in Canada. Second, when assessing whether the efficiency gains brought about by a merger are likely to be greater than, and will offset, any anticompetitive effects, the analysis must be as objective as is reasonably possible. Third, the time-frame for determining whether a merger is likely to prevent competition substantially will typically correspond to the time that it