Brookfield Asset Management Inc. - MRRS Decision

Headnote

Wholly-owned subsidiaries of parent holding shares of parent -- parent to conduct reorganization to eliminate subsidiaries' holdings of parent shares - reorganization will not have any adverse tax or other consequences to issuer or the public shareholders - reorganization will not change public shareholders' beneficial interest in parent -- parent exempt from issuer bid requirements in connection with reorganization

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 95, 96, 97, 98, 100, 104(2)(c).

November 22, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO AND QUÉBEC

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

BROOKFIELD ASSET MANAGEMENT INC.

(the Filer)

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the issuer bid requirements of the Legislation (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS Decision Document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision. In addition:

BAM Shares means Class A Limited Voting Shares of the Filer;

BH means Brascan Holdings (2005) Inc.;

BHC means Brascan Holdings (2005) Corporation;

BHL means Brascan Holdings Limited;

EHL means Edper Holdings (Ontario) Limited;

HHL means Hees Holdings Limited;

HIL means HIL Corporation; and

Mico means Mico Consolidated Ltd.

OBCA means the Business Corporations Act (Ontario).

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer was formed pursuant to articles of amalgamation dated August 1, 1997 and is organized pursuant to articles of amalgamation filed under the laws of Ontario dated January 1, 2005. The Filer is a reporting issuer under the Legislation and is not in default of any requirements of the Legislation.

2. The authorized capital of the Filer consists of: (i) an unlimited number of BAM Shares; (ii) an unlimited number of preference shares designated as Class A Preference Shares, issuable in series, of which 17 series have been created; (iii) an unlimited number of preference shares designated as Class AA Preference Shares, issuable in series, of which no series have been created or issued; and (iv) 85,120 Class B Limited Voting Shares. As of September 30, 2007, 580,890,329 BAM Shares were issued and outstanding, not including 377,481,798 BAM Shares held internally by subsidiaries of the Filer arising from a prior amalgamation. These shares are not included in the number of shares issued and outstanding in this class for voting or financial reporting purposes.

3. The BAM Shares, with the exception of the internally held BAM Shares, are co-listed on the Toronto Stock Exchange and the New York Stock Exchange.

4. BH is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. BH is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by BH are held by the Filer or by entities that are wholly-owned, directly or indirectly, by the Filer. BH holds 66,271,438 BAM Shares.

5. BHL is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. BHL is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by BHL are held by the Filer or by entities that are wholly-owned, directly or indirectly, by the Filer. BHL holds 44,524,291 BAM Shares.

6. BHC is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. BHC is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by BHC are held by entities that are wholly-owned, directly or indirectly, by the Filer. BHC holds 126,657,675 BAM Shares.

7. HIL is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. HIL is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by HIL are held by the Filer or by entities that are wholly-owned, directly or indirectly, by the Filer. HIL holds 29,562,538 BAM Shares.

8. HHL is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. HHL is an investment holding company and does not carry on any active business. After certain preferred shares of HHL are redeemed according to their terms prior to the Reorganization, all of the common shares and preferred shares issued by HHL will be held by entities that are wholly-owned, directly or indirectly, by the Filer. HHL holds 60,539,743 BAM Shares.

9. Mico is incorporated under the laws of Quebec and is not a reporting issuer under the Legislation. Mico is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by Mico are held by HHL. Mico holds 39,667,882 BAM Shares.

10. EHL is incorporated under the laws of Ontario and is not a reporting issuer under the Legislation. EHL is an investment holding company and does not carry on any active business. All of the common shares and preferred shares issued by EHL are held by entities that are wholly-owned, directly or indirectly, by the Filer. EHL holds 342,562 BAM Shares.

11. The Filer is proposing to reorganize to eliminate the internal holdings of BAM Shares, which is required by section 28(2) of the OBCA.

12. The reorganization entails a number of transactions which may be summarized as follows:

(a) BH, BHL and BHC will amalgamate to form Amalco 1 by way of an amalgamation under the OBCA;

(b) on the amalgamation of BH, BHL and BHC:

(i) the Filer will issue Class A Preference Shares to the holders of preferred shares of BH; and

(ii) Amalco 1 will acquire the BAM Shares held by BH, BHL and BHC;

(c) Mico will be wound up into HHL;

(d) HIL and HHL will amalgamate to form Amalco 2 by way of an amalgamation under the OBCA;

(e) on the amalgamation of HIL and HHL, Amalco 2 will acquire the BAM Shares held by HIL and HHL;

(f) EHL will transfer 342,562 BAM Shares to Amalco 2 in exchange for preferred shares of Amalco 2, which will subsequently be redeemed by Amalco 2 in exchange for a promissory note; and

(g) Amalco 1 and Amalco 2 will be wound up into the Filer and the BAM Shares held by Amalco 1 and Amalco 2 will be cancelled.

13. The reorganization does not and will not have any adverse tax or other consequences to the Filer, Amalco 1, Amalco 2, or the public shareholders of the Filer generally.

14. The reorganization will not change the number of publicly traded BAM Shares issued and outstanding as internally held BAM Shares are not included in the number of publicly-traded BAM Shares.

15. Following the reorganization, each of the public shareholders of the Filer will beneficially own the same aggregate number and same relative percentages of publicly traded BAM Shares that they owned immediately prior to the reorganization and will have the same rights and benefits in respect of such shares that they currently have.

16. The reorganization is subject to approval by the board of directors of the Filer.

17. The acquisition by Mico and Amalco 2 of BAM Shares and the acquisition by the Filer of the BAM Shares held by Amalco 1 and Amalco 2 on the wind-up of Amalco 1 and Amalco 2 into the Filer may be considered issuer bids under the Legislation.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted to the Filer.