Does it matter if the buyer is a competitor at the early stage?

Yes. When the interested buyer competes with you, the early stage carries three extra questions: what you hand over before any agreement exists, what happens to it if the deal fails, and whether the sale itself may draw a competition review. None of these rules out a competitor as a buyer. They affect how you sequence what you share and what you ask for first.

What you share before a deal exists

Until closing, the two businesses are separate. The Competition Act makes it an offence for a person to conspire, agree or arrange with a competitor to fix, maintain, increase or control the price for the supply of a product, or to allocate sales, territories, customers or markets, subject to the defences and exceptions in s.45(4) and the subsections after it. Keep an early summary at a level that does not reveal your prices or named customers, and let your lawyer decide when more is shared. The related question of sharing information in diligence has its own page.

If the deal does not close

For personal information about customers or staff, PIPEDA s.7.2(1) allows parties to a prospective business transaction to use and disclose it without the individual’s knowledge or consent if, among other conditions and subject to s.7.2(4), they have an agreement requiring the recipient to use it solely for purposes related to the transaction, to protect it, and to return or destroy it within a reasonable time if the transaction does not proceed. For other information, the CIPO says a trade secret loses its business value once it is made public and that enforcing it is the owner’s responsibility. Ask for return and destruction terms before you share.

Competition review

The Competition Act defines a merger as acquiring control over, or a significant interest in, a business of a competitor, supplier, customer or other person (s.91), so a competitor is not the only buyer it covers. On the Commissioner’s application, the Tribunal may, subject to ss.94 and 95, order a merger dissolved or a proposed one not proceeded with if it finds that it prevents or lessens, or is likely to prevent or lessen, competition substantially (s.92). The Competition Bureau says parties to a notifiable merger must notify it, and that an initial 30-day waiting period follows a complete notification. Ask early whether your sale is notifiable.