Cineplex Galaxy agrees to divestiture of 35 theatres in 17 cities to complete its merger with Famous Players

Posted on July 23, 2005

On May 27, 2005, Cineplex Galaxy (“Cineplex”) entered into a consent agreement with the Competition Bureau to complete its acquisition of Famous Players.  After an extensive merger review process, the Competition Bureau concluded the proposed transaction was likely to result in a substantial lessening of competition in the exhibition of first-run motion pictures in a number of urban areas.  In the consent agreement, Cineplex agreed to sell 35 theatres in 17 cities with total annual box-office revenues of approximately CDN$100 million.  The divestiture package included both stadiums and sloped theatres.  The proposed transaction closed on July 22, 2005.

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Competition Tribunal Adjusts to a ''Change in Circumstances''

Posted on July 1, 2005

BY D. JEFFREY BROWN

On May 30, 2005, the Competition Tribunal (the Tribunal) rescinded a consent agreement previously registered in September, 2003, on the basis of a "change in circumstances" pursuant to s. 106 of the Competition Act (the Act). The consent agreement had sought to resolve a concern expressed by the Commissioner of Competition (the Commissioner) that the acquisition by RONA Inc. (RONA) of Réno Dépôt and The Building Box "big box" home improvement stores from Kingfisher plc (Kingfisher) would substantially lessen competition in Sherbrooke, Quebec. To address this concern, the consent agreement had required that RONA divest to an independent third party the Réno Dépôt store in Sherbrooke.

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Proposed Amendments to the Investment Canada Act: Protection or Protectionism?

Posted on July 1, 2005

The Honourable David L. Emerson, Minister of Industry, announced on June 20, 2005 that the Government of Canada is introducing legislation "to update Canada's foreign investment legislation." Although Minister Emerson has indicated that the proposed amendments reflect ".an update of our security system, not a change in our investment policy," they could, if enacted, present a significant hurdle to foreign investors.

Bill C-59, An Act to Amend the Investment Canada Act, would enable the Governor in Council (upon the recommendation of the Minister of Industry) to review any foreign investment that, in the opinion of the Governor in Council, "could be injurious to national security," regardless of the value of the assets of the target Canadian business. In contrast, generally speaking, foreign investments in Canadian businesses are currently reviewable only if the asset value of the Canadian business exceeds an established financial threshold.1

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