INTRODUCTION
Our Canadian Mergers and Acquisitions: FAQs and 2019 Trends answers frequently asked questions regarding the regulation of public M&A in Canada and provides an outlook for what 2019 may hold based on significant developments we observed from the Canadian deal environment in 2018.
Despite headwinds such as turbulent stock markets, struggling oil prices and global political and economic uncertainty, much of which could continue in 2019, global M&A aggregate value once again surpassed US$3-trillion in 2018 and showed some recovery from the lower levels of activity experienced in 2017. Canadian M&A activity was also strong, driven in part by highly active private equity firms and pension funds and a surging Canadian-cannabis industry.
FREQUENTLY ASKED QUESTIONS ABOUT CANADIAN PUBLIC M&A
1 Who regulates trading in securities in Canada?
Trading in securities, including in M&A transactions, is largely regulated through securities legislation enacted by each of the provinces and territories. Each provincial or territorial securities act creates and empowers a provincial or territorial securities regulator to enforce such laws. These regulators have enacted a number of national, multilateral and local rules and policies that, among other things, seek to harmonize the application of certain aspects of securities laws across the country, including in relation to M&A transactions. In addition, companies whose securities are listed for trading on a stock exchange in Canada are subject to rules imposed by such stock exchange.
2 How are Canadian public issuers typically acquired?
Canadian public companies are typically acquired by way of either a plan of arrangement or take-over bid. A plan of arrangement is akin to a U.S. merger transaction with the addition of court supervision. "Friendly" M&A transactions are usually structured as plans of arrangement, with take-over bids being principally used for unsupported or "hostile" transactions. In preparing the annual Blakes Canadian Public M&A Deal Study, we found that over 90 per cent of the friendly transactions reviewed in recent years were completed by way of a plan of arrangement, with the other deals being completed by way of a take-over bid or a non-arrangement shareholder-approved structure, such as an amalgamation.
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© 2018 Blake, Cassels & Graydon LLP.
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