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Labatt Decision Creates Some Tactical Flexibility for Merging Parties

April-2-2007

Lawyer Richard Annan
Area Competition, Antitrust and Foreign Investment

Summary

On March 29, 2007 the Competition Tribunal denied the Commissioner of Competition’s application under section 100 of the Competition Act to prevent closing of the proposed acquisition of Lakeport Brewing Income Fund by Labatt Brewing Company Limited for a period of 30 days so that the Commissioner could finish her examination.  The conventional wisdom until this decision has been that it would be quite easy for the Commissioner to get a section 100 order to prevent closing.  The Tribunal in this decision emphasized that the Commissioner has the burden of demonstrating that closing of a proposed merger would substantially impair the ability of the Tribunal to remedy a substantial lessening or prevention of competition caused by a merger.  The Commissioner failed to satisfy this burden in this case and Labatt was allowed to close its transaction.

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