In the complex world of corporate mergers and acquisitions, the
impact of improper and incomplete due diligence should not be
underestimated. Amongst the various steps and legal issues
companies should discuss with their counsel before the articles of
amalgamation are filed is a careful review of all the relevant
leases of the amalgamating entities.
It is important to be clear on the type and nature of the
contemplated amalgamation before any lease is reviewed. Generally
speaking, amalgamations are the merging of two or more corporations
into one. In Canada, there are two forms of amalgamations:
short-form and long-form. Short-form amalgamations can be
“vertical”, where a corporation amalgamates with a
wholly-owned parent, or “horizontal”, where at least
two subsidiary companies, which are each wholly-owned by one parent
company, amalgamate. A long form amalgamation is any amalgamation
that is not a short-form amalgamation and requires the shareholders
of each
