Important Canadian Legal Considerations and Market Practices for U.S. and International Purchasers in Cross-Border Private M&A Transactions

2021 was the busiest year recorded for merger and acquisition (“M&A”) deals in Canada as more than $349 billion worth of transactions was announced, representing an approximately 135.5 per cent increase over M&A activity in Canada in 2020. Activity has remained strong in the first half of 2022 as overall M&A deal volume in both Q1 and Q2 each exceeded $90 billion. This active market can represent meaningful growth opportunities for United States (“U.S.”) and International purchasers seeking to enter the Canadian market through a cross-border M&A of a Canadian target corporation or to grow their presence in Canada through M&A activity. While Canadian M&A transactions include many analogous elements to U.S. and International M&A deals, they have their own notable differences as well.

In this article, we outline both analogous and Canadian-specific elements to be considered by U.S. and International purchasers and their advisers when considering private acquisitions of Canadian corporations. The article has been prepared through the lens of a private Canadian corporation as the target entity to be acquired. Where we outline analogous elements, we have provided specific Canadian context to aid U.S. and International purchasers and their advisers in how the Canadian M&A context may differ from their own M&A practices.