Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Cutting Through! Strategies to Address Recent Developments in the Regulatory Review Process

Posted in Private Transactions, Public M&A
Oliver J. BorgersTyler McAuley

In our last post we highlighted some of the important developments in the regulatory rules regarding foreign direct investment and the Competition Bureau’s merger review process. In consideration of these changes, we’ve put together some of the important strategies to keep in mind when conducting a transaction that will fall under these, or any other regulatory review process. 

Issue Spotting and Implementing a Review Strategy

In order to ensure a smooth review process, or to avoid the review process entirely through proper notification, parties to a transaction and their counsel must be alive to the applicable regulatory issues early in the trajectory of the deal. Counsel familiar with the law surrounding regulatory review should be engaged and, where the review process is triggered, a strategy should be developed for notification, review and compliance.

Tolling

Both the foreign investment and competition review process is structured around explicit timing triggers. Activating these triggers at the most desirable time can help deal lawyers “manage the clock” on a transaction. This can have important implications for the momentum of the deal. By triggering the mandatory waiting periods early, parties can avoid unnecessary delays caused by unplanned regulatory review.

Open Dialogue with the Regulators

Under either regulatory regime, parties are encouraged to engage in discussions with the regulators prior to, or as soon as possible after, submission of the first notification filings. The goal of consultation with the regulators is to identify issues early in the review process. Ultimately, this dialogue can help facilitate a more efficient and effective review process.

Implementing these three strategies can help parties navigate the regulatory review process more effectively, preserve their deal and avoid any unnecessary and wasteful delays.