Closing eleven days into a thirty-day waiting period

The situation

Two competing regional car-wash chains agreed to merge, with both sides needing to close before a seasonal reopening date after winter closures — a date tied to a financing commitment that would not extend past it. The overlap between the two chains was narrow: a single metro submarket, with a combined market share the parties' economists benchmarked easily against several similar car-wash mergers the Bureau had already reviewed in prior years.

The problem

The notification was filed in good time, but the 30-day baseline waiting period, if it ran in full, would land after the seasonal reopening date the financing depended on. The parties could not lawfully close before the waiting period expired — not because of any doubt about the merits, but because s.123 is a flat statutory bar, independent of how confident either side or their counsel felt about the outcome.

The numbers

The deal was valued at $27,000,000. The combined market share in the overlapping metro submarket was under 18%, straightforward enough for the Commissioner's office to assess quickly against a body of prior car-wash merger reviews. A waiver eleven days into the waiting period saved nineteen days against the deadline that mattered commercially.

The rule that decided it

Competition Act s.123(1) sets the floor: a transaction “shall not be completed before the end of (a) 30 days after the day on which the information required under subsection 114(1) has been received by the Commissioner, if the Commissioner has not, within that time, required additional information… or (b) 30 days after the day on which the information required under subsection 114(2) has been received…, if the Commissioner has… required additional information”. No supplementary request issued here, so paragraph (a) applied: 30 days from receipt of the initial notification.

Section 123(2) is the one lawful way around that floor before it expires: a transaction “may be completed before the end of a period referred to in subsection (1) if, before the end of that period, the Commissioner or a person authorized by the Commissioner notifies the parties… that the Commissioner does not, at that time, intend to make an application under section 92”. Eleven days into the 30-day period, having completed its preliminary assessment early given how narrow and well-precedented the overlap was, the Commissioner's office gave that notice. The parties closed the same day.

The phrase “at that time” is not incidental. A s.123(2) waiver is a statement about the Commissioner's present intention, not a finding that the transaction raises no issue, and not an exemption from Part IX. It does nothing to the limitation period in s.97 — that period is set by whether the merger was notified at all, under s.97(a) or (b), and runs the same whether the deal closed on day 11 or day 30 of the waiting period.

The outcome

The parties closed eleven days into the waiting period and reopened for the season on schedule. The Commissioner's office did not subsequently apply to the Tribunal — consistent with how these waivers work in the ordinary course, where they issue on transactions with modest, easily benchmarked overlap.

What it would have cost otherwise

Without the waiver, the parties would have been legally barred from closing until day 30, missing the seasonal reopening date the financing commitment was built around — a hard commercial deadline, not a negotiating position, and one that a seven-figure swing in first-season revenue or a breached financing covenant would have followed directly from missing.

The tell

The tell, for anyone newer to this area, is treating a s.123(2) waiver as equivalent to the comfort an advance ruling certificate gives. It is not. An ARC is a substantive finding plus a full exemption from Part IX plus a shortened one-year limitation period under s.97(a). A waiver is narrower: permission to close early, full stop, with the Commissioner's ordinary challenge rights — whichever of s.97(a) or (b) applies — left entirely intact.

Takeaways

• • s.123(1) bars closing before the waiting period expires; s.123(2) is the only lawful way to close earlier, on notice from the Commissioner given before that period ends.
• • A s.123(2) waiver is not a certificate. It does not exempt the transaction from Part IX and does not affect the limitation period that would otherwise apply under s.97.
• • “At that time” in the waiver's own language signals a present intention, not a permanent finding — treat it as narrower comfort than an ARC, because it is.
• • A modest, easily benchmarked overlap against prior reviewed deals in the same sector is a real factor in how quickly the Commissioner's office can complete a preliminary assessment and issue a waiver.

Sources

• • Competition Act, R.S.C. 1985, c. C-34, s.123(1) and s.123(2) — the waiting period and the waiver of it.
• • Competition Act s.97 — the limitation period, unaffected by an early closing under s.123(2).
• • Treadstone Law — closing conditions on a business purchase in Ontario — general background on structuring closing timelines around a regulatory condition; does not address the s.123(2) waiting-period waiver above.