COMPITmON .TRIB~•NAL TRIBUNAL DE LA CONtURRENCE ~ er-er~ /o -z ~ ~ IDEC 8 : 1998 ~ yI REGISUAR - RfGISJRAIRE T THE COMPEmtON TltlBUNAL - o~;;: ~-;:-fl~Tt.} JN THE MATIER OF THE COMPETOION ACT. R.S. 1985. c.C-34 as amended, and the Competition Tribunal Rules, SOR/94r290, as amended (the "llules~');
AND IN THE MA TIEil OF an inquiry pursuant to subsection 10(1 )(b) of ilie Competition Act relating to the proposed
acquisition of tCG Propane Inc. by Superior Propane Inc.;
AND lN ntE MATTER OF an Application by the Director of Investigation and Research for an interim order pursuant to section 100 of the Competition Act.
BETWEEN: fm: DIRECTOR OF INVESTIGATION 0 AND RESEARCH Applicant - and .. SUPEMJO!l PltOPANE INC., PETRO-CANADA INC., tHE cHANCELLOR HOLDINGS CORPORATION and ICG t>ROPANE INC. Respondent!! MEMORANDUM OF ARGUMENT OF THE RESPONDENTS PETRO-CANADA,
THt. CHANCELLOR HOLDINGS CORPOltATJON AND lCG PROPANt INC. 0 INTRODUCTION 1. These Respondent~ rely on the Memorandum of Argument filed on behalf of Superior and the authorities reJiid on therein.
9lt-~ 02/l i ·d £29-l 26~1-£99-911+
2 B~CKGROUNQ Of T8WSACUO~ 2. Petro.Canada decided in 1996 to dispose oflCG and thereafter irtltia.ted a l'tocess by which that would occur. Discussions with the Competition Bureau with respect to a possible transaction with Superior began on or about June 19. 1998. Superior stated that it was willing to take on thil risks relating to any possible proceedings under the Competition Act
(the "Act"'). Ott Jtm.e 29. 1998. based itt part on the apparent willingness of the Competition Bureau to be f1exib1~ and accommodate its concerns regatding the risks associated with any possible proceedings under the Act; Petro-Canada and its subsidiary. The ChattceJlor Holdings Corporatidn (collectively. "Petro-Canada"'), decided to pursue an agreement with
Superior.
Affi.avit of Andrew Stephens, paragraphs 2-13 3. The parties execut~d a share purchase agreement as of July 20, 1998, and notified the Director ofsuchputsuant to Parttx of the Acton July 21. 1998. The agreement prQ'Vided that the transaction Was to close by December 1S . 1998, the initially proposed closing date being October 30, 1998. Subsequently, the parties agreed to postpone the intended closing and, on three weeks' notice to the Bureau, advised of the reviseditrtended closing date. being December 7. t 998. 0 Affidavit of Andrew Stephetts, paragraphs 14-15 4. The Bttteau's revie• of the proposed transaction is detailed in the Affidavit of John Pecman on behalf of the Applicant The Bureau provided its preliminary conclu.~ions on October JO, 1998, and confirtned its final conclusions on November 30, 1998.
Af'flrurrit of John Pecmao; Affldawit of ADdtew Stephens, paragraph l 6 5. Throughout the period of the Bureau's review of the proposed 1ransaction. Petro-Canada has 0 continued to purst.E reasonable hold separate artangements with the Bureau which would: (a) Permit a ~1 review of the proposed merger by the Director; {b) Preserve tCG as a separate and viable competitive entity pending completion of a review under the merger provisions of the Act by the Director; and
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•
4 sought by the Directbr to prevent dosing of the proposed transaction is more ;ntrusive or restrictive than necesS&ry to ensure the Tribunal's ability to remedy the effect of the proposed merger on competition would not be substantially impaired.
10. the parties believe that the proposed transaction will not result in a substantial lessening of competition and wi~l generate great efficiencies in the propane disttibution and supply business. 1f the trantaction does not proceed. these benefits will not be realized.
Afflda-vit of Andrew Stephens, paragraph 24
CONCLUSION 11. l1te two material is~ues on which the Director and the parties differ, namely the substantial lessening of compe,ition and efficiencies. will be detetmined by the Tribunal after a full proceeding under sebtion 92 of the Act. It is submitted that. in the interim, it is in the public interest for the trl.bunal to permit the transaction to close under the hold separate arrangement propostd by Superior s~ that will preserve the opportunity for the transaction to be completed and. at the same time. preserve the Tribunal's ability to remedy the effect
of the prope>sed acquisition on competition under section 92 of the Act. 0 Afttdavit of Andrew Stephens, paragraphs 24 and 26 All of which is re5Pectfully submitted~o f December, 1998. 0
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~~k-r~ (416) 863-4446 FRASER MILNER 1 First Canadian Place P.O. Box 100 Toronto. Ontario M5X 182 of counsel for the Respondents