Canadian M&A Perspectives

Private and Public Mergers & Acquisitions | Private Equity

Doing Business in Canada: Read the latest updates to our popular guide

Posted in Canadian Market Entry, Contractual Matters

McCarthy Tétrault’s Doing Business in Canada is an indispensable reference tool for lawyers and business persons regarding the legal aspects of establishing or acquiring a business in Canada. The newest edition reflects legislative changes including:

  • Canadian anti-spam legislation (CASL)
  • updates on investment thresholds related to the Competition Act and Foreign Investment laws
  • Supreme Court decisions and legislation affecting copyrights
  • new information for employers regarding unjust dismissal complaints
  • updates on anti-treaty shopping measures introduced in 2014

We encourage you to consult one of our lawyers to gain a more comprehensive analysis of the legal implications of your proposed investment.

Download the updated guide 

Keeping it Clean

Clean Teams: a way to keep your options open in M&A transactions

Posted in Public M&A
Patrick BoucherFraser Bourne

In the context of M&A transactions, the use of “clean rooms” (i.e., data rooms containing commercially sensitive information concerning a target only available to clean teams) and “clean teams” (i.e., isolated work groups often made up of third party experts having access to clean rooms) to isolate commercially sensitive information concerning a target from the prospective bidder(s) can sometimes help clear the path to a negotiated deal. Continue Reading

“Golden Leash” arrangements secure ISS’s cautious nod

Posted in Public M&A, Shareholders, Strategy
Shane C. D'SouzaDeandra Schubert

After taking a break last proxy season, “golden leash” arrangements are back in the spotlight. A few days ago, Institutional Shareholder Services Inc. (“ISS”) gave “cautious support” to so-called “golden leash” arrangements between Third Point LLC and its two nominees to the board of Dow Chemical Co.

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Four Due Diligence Issues in Insurance M&A Transactions

Posted in Private Transactions, Public M&A, Strategy
Ana BadourIan C. Michael

Insurance M&A activity, in both the Canadian market and globally, has been on the rise since the 2008 financial crisis, and is expected to continue to increase. Deloitte recently reported that there were 399 insurance M&A transactions in Canada and the United States during 2014, an increase of 27% over 2013. The consulting firm Optis Partners reported that the first half of 2014 was the most active M&A period since they started tracking transaction information in 2008. In a survey published in 2014 by the professional services firm Towers Watson, over 85% of North American insurance executives said that they expected insurance M&A volume to grow over the next one to three years, and 78% of such executives stated that they were actively considering acquisitions.

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Harnessing Social Media in Proxy Contests: Opportunities and Legal Challenges

Posted in Private Equity, Public M&A, Shareholders, Strategy
Shane C. D'SouzaDeandra SchubertBlake Jones

Social media has very seldom been leveraged in Canadian proxy contests. One reason for this may be the lack of knowledge about its full potential.[1] To address this reason, our first post in this series reviewed social media’s impact on public discourse and proxy contests in the U.S. and Canada.

Another reason for the limited use of social media in Canadian proxy contests is the lack of specific regulatory guidelines. Unlike in the U.S.,[2] in Canada there is no regulatory guidance on the use of social media to communicate with shareholders. This article reviews some legal considerations applicable to the use of social media in Canadian proxy contests.

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Harnessing Social Media in Proxy Contests: Not Just “Social”

Posted in Private Equity, Public M&A, Shareholders, Strategy
Shane C. D'SouzaDeandra SchubertBlake Jones

Social media has revolutionized how stakeholders receive information about companies. An estimated 1.79 billion people used social media in 2014; 2.44 billion will by 2018.[1] Despite such staggering statistics, social media has not been leveraged to its full potential in Canadian proxy contests. According to a 2013 survey,[2] a majority of directors on the boards of Canada’s largest companies acknowledged that they did not know much about social media.

This is the first of two posts about harnessing social media in Canadian proxy contests. It reviews the use of social media to influence public discourse and proxy contests in the U.S. and Canada. Our second post will review some legal considerations applicable to the use of social media in Canadian proxy contests.

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CSA Releases Amendments to the Take-Over Bid Regime

Posted in Private Equity, Public M&A, Shareholders, Strategy

On March 31, 2015, the Canadian Securities Administrators (CSA) published a CSA Notice and Request for Comment with respect to proposed amendments to Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids (MI 62-104) and changes to National Policy 62-203 – Take-Over Bids and Issuer Bids.

The proposed amendments codify and in some cases clarify the concepts previously announced by the CSA in September 2014 and result in some significant changes to the take-over bid regime. Please see our detailed report Amendments to Take-Over Bid Rules Will Deliver More Support to Boards for an in-depth review of some of the key features of the proposed amendments.

Good Faith, Honest Performance and M&A: Top 5 Takeaways Stemming from Bhasin v. Hrynew

Exploring the impact on Canadian mergers and acquisitions of the Supreme Court of Canada’s recent recognition of a new common law duty of honest performance

Posted in Contractual Matters, Private Transactions, Public M&A, Strategy
Heidi Gordon

There’s been a lot of buzz surrounding the Supreme Court of Canada’s recent precedent-setting judgement, Bhasin v. Hrynew, 2014 SCC 71, in which the Court recognized, for the first time, a new common law duty that applies to the performance of contracts throughout Canada. The new common law duty is a duty of honest performance, and is a manifestation of the general organizing principle of good faith. The implication is that parties must perform their contractual duties honestly and reasonably, and that they must have appropriate regard to the legitimate contractual interests of the other parties to the contract. For an overview of the Bhasin decision, click here.

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New 2015 Competition Act Merger Notification Threshold

Posted in Private Equity, Private Transactions, Public M&A
Oliver J. BorgersMichele Siu

The Competition Bureau has announced that the pre-merger notification transaction-size threshold for 2015 will increase to $86 million from the 2014 threshold of $82 million.  The 2015 threshold will come into effect immediately following publication in the Canada Gazette Part 1 (anticipated to occur on February 7, 2015).  As per the indexing mechanism set out in the Competition Act (Act), the pre-merger notification threshold is reviewed annually.

The threshold is based on the book value of assets in Canada of the target (or in the case of an asset purchase, of the assets in Canada being acquired), or the gross revenues from sales “in or from” Canada generated by those assets, calculated in accordance with the Notifiable Transactions Regulations under the Act. The Competition Bureau must generally be given advance notice of proposed transactions when the acquired assets in Canada or revenues generated in or from Canada from such assets exceed $86 million, and when the combined Canadian assets or revenues in, from or into Canada of the parties together with their respective affiliates exceed $400 million.   This amount has not been reviewed and remains the same as in 2014.

5 Corporate Governance Tips to Reduce Risk in the M&A Process

Posted in Private Transactions, Public M&A, Shareholders, Strategy
Nathan Montgomery

Because of the growing risk of litigation by unhappy (or simply opportunistic) shareholders following the sale or acquisition of a company, corporate governance practices during the M&A process face increasing scrutiny.

In a recent article titled “Documenting the Deal: How Quality Control and Candor Can Improve Boardroom Decision-making And Reduce The Litigation Target Zone”, forthcoming in The Business Lawyer, Leo Strine, Chief Justice of the Delaware Supreme Court, sets forth some best practices for directors and legal and financial advisors “to conduct an M&A process in a manner that: i) promotes making better decisions; ii) reduces conflicts of interests and addresses those that exist more effectively; iii) accurately records what happened so that advisors and their clients will be able to recount events in approximately the same way; and iv) as a result reduces the target zone for plaintiffs’ lawyers”.

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