Compass Lexecon’s Economic Analysis helps MSC’s acquisition of the Port of Halifax gain Regulatory Clearance in Canada

Compass Lexecon was jointly retained by PSA Canada Ventures Ltd., the terminal operator at the Port of Halifax, and by Terminal Investment Limited Holding S.A. (TIL) to assess potential competitive effects arising from the acquisition of an ownership stake by TIL in the Port of Halifax. TIL is majority-owned by MSC, a global leader in container shipping that accounts for a large portion of the containers shipped from Europe to North America’s Atlantic coast.

Compass Lexecon’s economic analysis specifically focused on addressing the Canadian Competition Bureau’s concerns about the ability and incentives of the combined firm to reduce competition through vertical foreclosure, either through raising the price or degrading the quality of terminal services at the Halifax port for carriers competing with MSC.

To address the Canadian Competition Bureau’s vertical concerns, the Compass Lexecon team performed extensive economic analyses showing that the proposed transaction would not create incentives for the Port of Halifax to raise pricing after the transaction. These vertical analyses were included in a white paper co-authored by Jonathan Orszag and Rick Flyer, which was submitted and presented to the Canadian Competition Bureau. A few days after Compass Lexecon’s oral presentation of their analyses, the transaction was cleared on August 19, 2024, without any concessions (as a no-action letter was issued by the agency).

Jonathan Orszag and Rick Flyer were supported by a Compass Lexecon team that included Kirupa Ramaiah and Mike Foley. Compass Lexecon worked closely with Jason Gudofsky and Michael Caldecott of McCarthy Tétrault; J. Kevin Wright of DLA Piper LLP; and Subrata Bhattacharjee and Denes Rothschild of Borden Ladner Gervais LLP.