Mergers and acquisitions (M&As) in Canada provide a lot of advantages for businesses and corporations, regardless of their size and resources. Throughout Canada’s history, there have been many large M&As to expand these businesses and to maximize their wealth and assets.
For the year 2022, the largest M&A in Canada was Royal Bank of Canada’s acquisition of HSBC Canada. The deal was reportedly worth around US$10 billion (or around C$13.5 billion at that time).
In previous years, there have been other mergers and acquisitions in Canada that are larger in terms of value. These are:
- Vivendi SA (France) acquires Seagram Co Ltd (Canada): US$40.43 billion in 2000
- Rio Tinto Canada Holdings Inc. acquires Alcan Inc.: US$38 billion in 2007
- Enbridge Inc. acquires Spectra Energy Corp. (US): US$28 billion in 2016
- CNOOC Canada Holding Ltd acquires Nexen Inc.: US$19.12 billion in 2012
- Xstrata PLC (Switzerland) acquires Falconbridge Ltd: US$17.40 billion in 2006
- Cia Vale do Rio Doce SA (Brazil) acquires Inco Ltd: US$17.15 billion in 2006
- Suncor Energy Inc. acquires Petro-Canada: US$15.1 billion in 2009
- Rogers Communications Inc. acquires Shaw Communications Inc: US$14.87 billion in 2023
- Teck Cominco Ltd acquires Fording Canadian Coal Trust: US$14.1 billion in 2008
- Burger King Worldwide Inc. (US) acquires Tim Hortons Inc.: US$11.4 billion in 2014
This list excludes the spinoffs which may also be considered as large mergers and acquisitions in Canada:
- Bell Canada Enterprises (BCE) Inc.’s spin-off to Nortel Networks Corp.: US$59.97 billion in 2000
- EnCana Corp.’s spin-off to Cenovus Energy Inc.: US$20.26 billion in 2008
Did you know that there were more than 3,400 mergers and acquisitions deals in Canada in 2022 alone? Read more in our report on trends in mergers and acquisitions in 2023.
The terms “mergers” and “acquisitions” in Canada may have been used interchangeably, but there are some differences.
In a merger, a new company may be formed when two separate companies merge into one.
In an acquisition, the larger company takes over (or purchases) a smaller company (also called the target company). Acquisitions also happen when the larger company only acquires or purchases a branch or a division of the smaller company.
Another difference is that mergers usually take place between companies of similar sizes. Acquisitions happen between a larger company and a smaller company.
The regulation of mergers and acquisitions in Canada is under the Competition Bureau, headed by the Commissioner of Competition. The Bureau is tasked with the enforcement of the Competition Act, the federal legislation on mergers and acquisitions in Canada.
The Competition Act
The Competition Act governs mergers and acquisitions in Canada and other acts to ensure healthy competition among Canadian businesses.
The Act provides for certain procedures during mergers and acquisitions in Canada, crimes regarding monopolies and cartels, and civil reviewable matters that are under the jurisdiction of the Competition Tribunal.
1. Mergers and Acquisitions in Canada
Under the Act, mergers and acquisitions in Canada may either be a notifiable transaction (Part IX, Competition Act) or a non-notifiable transaction. An M&A will be notifiable if certain financial thresholds are reached subject to certain exemptions provided in the Act.
When a notifiable M&A has been entered without the proper notice to the Competition Bureau, the Bureau may question it. The Bureau may do this either before it is completed or for 1 year after it has been completed.
Here’s the process behind a notifiable merger and acquisition in Canada:
Submission of a pre-merger notification
Parties to the M&A will submit certain information to the Competition Bureau, where a 30-day waiting period will be imposed upon the parties.
Competition Bureau’s Review
This will determine whether the proposed transaction will result in a substantial prevention or lessening of competition in Canada’s markets.
Competition Bureau’s Decision
- if the merger or acquisition results in a substantial prevention or lessening of competition in Canada’s markets, the Bureau may negotiate the terms of the transaction with the parties, request for a divestiture, or challenge the merger or acquisition before the Competition Tribunal
- otherwise, the Bureau will issue an Advance Ruling Certificate or a No-Action Letter, which will allow the completion of the merger and acquisition in Canada
Discover the all-time largest acquisitions in Canadian history in this article.
2. Crimes under the Competition Act
In relation to maintaining a healthy competition among businesses in Canada, the Competition Act provides for certain crimes, such as:
2.1 Conspiracy (Section 45)
When competitors agree, either written or not, to:
- fix, maintain, increase or control prices of the product they offer to the public;
- allocate between them the sales, territories, customers, or markets; or
- fix or control the production or supply of their product
2.2 Bid-rigging (Section 47)
When competitors manipulate the results of bidding to favor one competitor in exchange for something; it is committed:
- when two or more bidders agree that one or more of them will not submit a bid; or
- when one bidder will submit and then withdraws it because of a request of another bidder; or
- when bids that are submitted have been agreed between two or more bidders
2.3 False or misleading representations (Section 52 (1))
Some forms of false or misleading representations are:
- Deceptive telemarketing (Section 52.1 (3)): when a product is offered by making materially false or misleading representations and other prohibited acts
- Drip pricing (Sections 52(1.3) and 74.01(1.1)): when a product is offered at an unattainable price because buyers must pay additional charges or fees
- Double ticketing (Section 54): when a product is sold at a higher price between two or more prices
- Misleading multi-level marketing (Section 55) and pyramid selling (Section 55.1): when compensation, purchases, or inventory loading are pre-conditions for recruitment, and when a buy-back guarantee is unreasonably not an option
When found guilty of these crimes, a penalty of fines and/or imprisonment may be imposed upon these businesses and their officers.
3. Civil Reviewable Matters
There are certain acts of companies that may be reviewed by the Competition Tribunal. Reviews may start when complaints are filed by private individuals or by the Competition Bureau itself.
Provisions of the Competition Act provide for such reviewable matters, such as:
- Refusals to deal (Section 75)
- Price maintenance (Section 76)
- Exclusive dealing (Section 77)
- Abuse of dominant position (Sections 78 and 79)
Misleading representations under Section 52 and Section 74.01 of the Competition Act are both civil and criminal in nature.
To learn more about mergers and acquisitions in Canada, contact one of Lexpert's best-ranked mergers and acquisitions lawyers in your territory or province.