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Public acquisitions in Canada are a multi-step process. One of its mandatory components is obtaining approval from the holder of the securities, as well as the court.

Takeover bids are also a fairly popular way to acquire Canadian public companies. One can also change control over a company by merging two or more companies.

The table below outlines the main advantages and disadvantages that a buyer should consider when choosing a method of acquiring a public company in Canada. Each method has its pros and cons, so it is impossible to say unequivocally which of them is preferable for a private investor. The choice is yours.

Acquisition method



Public transactions.


A transaction that is carried out through a process established by law,    previously set out in detail. An agreement is reached by negotiations between buyer and seller.

  • Acquisitions of shares in a Canadian public company and other related transactions may be progressiveprocess.


  • Flexibility, including with respect to convertible securities and tax planning.


  • In addition to the acquisition of shares, the transfer of assets or reorganization may take place.


  • Exemption from registration in the United States for the issuance of securities for residents.


  •  The court approval process provides a platform for the complaints of those who oppose the transaction.


  • At least two-thirds of the shareholders' votes are usually required to be approved.

Acquisition proposal. 

Receive securities holders on the acquisition of more than 20%

voting/equity securities of a certain class.

  • No negotiations with the target commission.
  • Full control of the document disclosure process rests with the buyer.


  • Acquisition of a 100% stake in a Canadian public company.
  • The deal runs in two stages, which stretches the deal over time.
  • Funding conditions must be met.


Two or more companies start a deal on a merger in Canada directly.

  • Acquiring a private company in Canada can be done in one step.
  • No court approval required.
  • Approval of two-thirds of the target shareholders’ votes.
  • The company's convertible securities must be considered outside the pool.

Considerations before purchase

A potential buyer should consider a number of issues before making his final decision about the purchase. Among those are:

  • Available funding

If the remuneration for the takeover bid is cash, the buyer must have sufficient financing arrangements to make full payment for the securities.

  • Purchase prior to bidding

Following the public announcement of the takeover bid, the buyer's ability to acquire additional shares in the target company in Canada outside the takeover bid is limited. Thus, buyers prefer to accumulate shares (either through purchases on the public market or by private agreement) before the announcement of the takeover bid, acquiring a "retained position" in the company. The buyer must be careful when purchasing more than 19.9% ​​of all securities of a private company.

  • Agreements to support or block voting

Before allocating significant resources to the acquisition of shares of a Canadian private company, the buyer often seeks support from one or more major holders of securities. This support is confirmed by a voting support agreement (in the case of an agreement or merger plan) or a blocking agreement (in the case of a takeover bid). Any such agreement must be submitted to the securities regulators and be available to the public.

Final word

All information contained in this publication is for informational purposes only and should not be perceived as professional advice.

If you are planning to acquire control of a private company in Canada, seek advice on structuring securities transactions in Canada from our company's seasoned specialists.