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What are the potential outcomes of a merger control investigation in Canada?
Merger reviews can give rise to a number of outcomes. The most common is that the transaction is cleared. This may be by way of an advance ruling certificate, which insulates a transaction from a possible subsequent challenge from the commissioner of competition on the basis of the facts that were provided at the time that the advanced ruling certificate was requested. Transactions may also be cleared by way of the provision of a no-action letter indicating that the commissioner of competition has no present intention to challenge the transaction. Transactions may also be cleared on the basis of the expiry of the waiting period, with no action being taken by the commissioner to prevent closing.
In cases in which the commissioner has concerns about a transaction, the parties may give undertakings to the commissioner with respect to either future behaviour of the merged entity or with respect to divestiture, in order to address the concerns.
More commonly, when a remedy is required, transactions may be cleared on the basis that the parties enter into a consent agreement, which is registered with the Competition Tribunal and has the force of a court order. The consent agreement will provide for whatever remedies the commissioner of competition deems appropriate, including ongoing behavioural remedies, divestitures, quasi-structural remedies and combinations of the above.
If the parties do not agree on a remedy, the commissioner may file an application with the tribunal to challenge the transaction. If the transaction has not yet closed, the challenge will be to enjoin closing or at least enjoin closing with respect to the relevant assets which the commissioner alleges give rise to a risk of a likelihood of substantial prevention or lessening of competition. If the transaction has already closed, the application will seek the dissolution of the merger or disposition of assets or shares. The order may, on consent, require other action.
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