Competition Bureau Issues Guidance On Efficiencies Claims In Merger Transactions

Competition Bureau Issues Guidance on Efficiencies Claims in Merger Transactions

The Competition Bureau (the "Bureau") recently published for public comment a "Practical Guide to Efficiencies Analysis in Merger Reviews" (the "Guide"). The Guide:

• highlights the unique and powerful role efficiencies play in Canadian merger review.
• demonstrates the importance and value of early stage estimation of efficiencies in potential M&A.
• describes the Bureau's processes for evaluating efficiencies claims.

This guidance provides merging companies and their advisors with a roadmap for engaging with the Bureau in defence of efficiency-enhancing transactions.

Background

Under Canada's Competition Act, a merger found to prevent or lessen competition substantially cannot be prohibited if the gains in efficiency the merger is likely to bring about are greater than, and will offset, the merger's competitive effects.