New Canadian Competition Rules To Be Tested Sooner Rather Than Later

By: Ainsley Brown

The Suncor Energy Inc. attempted take over of Petro-Canada is going to prove to be the first test of the amended and some would say controversial Competition Act.

According to the new rules the Competition Bureau has a 30 day tome frame in which to either approve the C$19.2 billion deal or issue a  second request from more information about the impact the take over could have on competition. The major issue being the possible impact on retail gasoline prices given that both companies operate services stations. Gasoline prices and competition, a highly politicized issue, has proved to be of high concern to the Competition Bureau – so it should come as little surprise if a second request is indeed ordered.

In order to prevent the cost of compliance increases witnessed in the US – and this is where much of the controversy about the new rules stem – where, according to the National Post, costs per merger has gone up as much as $5 million, the Competition Bureau last week issued guidelines on how it would handle second requests. The will seek to encourage early consultations prior to the merger; senior bureaucrats will try their best to do an advanced vetting process and will usually limit this to 30 or less individuals in a company.

Will it all work – I guess we will see.

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One comment

  • Scott

    Early consultation ? Are you kidding me? Inserting the Government into a BUSINESS deal prior to its completion is lunacy. Depending on how the mechanisms are constructed this could severly limit M&A in the Canadian market and thus competiton, the markets appeal to foreign investment, etc.

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