1. Competition Act
Earlier today, the Canadian Competition Bureau (the “Bureau”) announced that the pre-merger notification “Transaction-Size” threshold will increase from $82 million to $86 million for 2015. The new threshold, which is revised annually and is indexed to the growth of Canadian GDP, will come into immediate effect following the publication of the Canada Gazette Part 1 (anticipated to occur on February 7, 2015).
Under the Competition Act, transactions that exceed the following thresholds generally require pre-merger notification:
- “Parties-Size”: where the combined Canadian assets or revenues of the parties and their affiliates in, from or into Canada exceed $400 million; and
- “Transaction-Size”: where the Canadian assets or revenues of the target firm generated in or from Canada exceed $86 million.
2. Investment Canada Act
The Investment Review Division recently announced that the threshold for pre-merger review for investments involving WTO members will increase from $354 million to $369 million for 2015. This threshold is indexed annually to the growth in Canadian GDP. It is expected that the new threshold will also come into effect upon publication in the Canada Gazette Part 1 later this month.
Under the Investment Canada Act, direct investments by WTO investors in non-cultural businesses exceeding the $369 million threshold (based on the “book value” of the Canadian business’ assets) are subject to premerger review and approval by the Minister Industry that the investment is of “net benefit to Canada.”
The thresholds applicable to investments involving non-WTO investors and investments in the cultural sector remain unchanged at $5 million for direct investments and $50 million for indirect investments.
While Canadian government previously announced that the calculation of the Investment Canada Act review threshold will be changing from “book value” to “enterprise value” and increased to $600 million, the timing for the move to the “enterprise value" threshold remains unknown. Accordingly the “book value” threshold will apply until the appropriate regulations are passed.
For a copy of the Bureau’s press release regarding the threshold, please click here.
For a link to the Investment Review Division's threshold for review, please click here.