Canada FDI control
Produced in partnership with Davies Ward Phillips & Vineberg LLP
Practice notesCanada FDI control
Produced in partnership with Davies Ward Phillips & Vineberg LLP
Practice notes
A conversation with Mark Katz, partner at Canadian law firm Davies Ward Phillips & Vineberg LLP, on key issues on foreign direct investment (FDI) Merger control in Canada under the Investment Canada Act.
General overview of the Investment Canada Act regime
The Investment Canada Act (ICA) authorises the Canadian government to review certain Investments by non-Canadians in Canadian businesses and, where considered appropriate, to either prohibit these investments from proceeding, order investments to be unwound or divestitures made, or condition approval on undertakings and commitments by the investor.
There are two key aspects to ICA review:
- •
the ‘net benefit review’ process, and
- •
the ‘national security review’ process.
Pursuant to the net benefit review process, a non-Canadian proposing to acquire control of a Canadian business (including a business in Canada owned by a foreign entity), and whose acquisition exceeds certain thresholds, must satisfy the government that its investment will be of net benefit to Canada. Although the ICA sets out various factors to be considered in this regard, the decision is largely discretionary and will
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Jurisdiction(s):
United Kingdom
Key definition:
Merger control definition
What does Merger control mean?
The merger control rules of the UK are contained in the enterprise Act 2002, as amended. Under the UK merger control rules, the competition and markets authority has jurisdiction to review both completed and anticipated merger transactions provided there is a ‘relevant merger situation’. The UK rules do not generally apply to mergers in relation to which the European Commission has exclusive jurisdiction under the EU Merger Regulation. Where the transaction falls within the scope of any national or supranational (eg the EU or COMESA) merger control rules, it is common for the parties to the agreement to agree that the transaction shall be conditional upon merger control approvals having been received and no relevant competition authority having raised objections to the transaction (Enterprise Act 2002).
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