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ARTICLE · 03 APRIL 2013

The Competition Bureau Clears Leon's/The Brick Furniture Merger

Parties considering retail mergers should take note of the approach that the Canadian Competition Bureau took in analyzing the proposed acquisition of The Brick Ltd. and its subsidiaries by Leon’s Furniture Limited.

CanadaAntitrust/Competition Law

Parties considering retail mergers should take note of the approach that the Canadian Competition Bureau took in analyzing the proposed acquisition of The Brick Ltd. and its subsidiaries (The Brick) by Leon's Furniture Limited (Leon's). Stikeman Elliott LLP has experience acting as competition counsel in a number of retail mergers, including the recent acquisition by Canadian Tire of Forzani, in which the Bureau took a similar approach. Both retail merger reviews highlighted the key role of econometrics in the Bureau's assessment of whether the merged entity will have the ability to increase prices.

On March 19, 2013, the Bureau released a position statement in respect of the merger of the two national retailers of furniture, mattresses, appliances and electronics. The Commissioner of Competition issued a "no action letter" to Leon's and The Brick on March 11, 2013, meaning the merger will not be challenged. The Bureau's review focused on the potential competitive

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