In light of the current COVID-19 pandemic with declining demand and excess capacity in many sectors, companies will want to take advantage of opportunities to increase operational efficiencies, including through mergers and acquisitions. Where such mergers are efficiency motivated, there may be increased scope for merging parties to use the efficiencies defence in Canada – something that was successfully done by Canadian National Railway Company late last year in connection with its acquisition of H&R Transport Limited (the “Transaction”).
Competition Bureau Review
Following its review of the Transaction, the Competition Bureau concluded that the Transaction would likely result in a substantial lessening of competition for full truckload refrigerated intermodal services in eight relevant markets in Canada. In particular, the Bureau found that CN would be able to charge higher prices and provide lower quality service to customers in those markets. However, as discussed in more detail in its New Release and Position Statement issued last week, the Bureau ultimately decided to discontinue its investigation and allow the Transaction to proceed after concluding that the efficiencies defence had been satisfied.
Continue Reading The Efficiencies Defence – Here We Go Again!