Prior to the union of the North West Company and the Hudson's Bay Company in 1821, the endemic struggles between the two fur-trading rivals were capped by a violent encounter on 19 June 1816 at Seven Oaks, a few kilometers from the HBC's Fort Douglas in the Red River Settlement. Sometimes referred to as the Seven Oaks Massacre or the Seven Oaks Incident, the event provoked retaliation by the HBC and led to a merger of the two companies.

The colony at the vital junction of the Red and Assiniboine rivers, established by Thomas Douglas, Fifth Earl of Selkirk, was perceived by the Nor'Westers as the base from which the HBC was preparing to launch its penetration of the Athabaska country. It posed a threat, as well, to the annual brigades of the Montréal-based company, lying athwart their main communication route.

In the spring of 1816, the HBC officers and men seized and destroyed the Nor'Westers' Fort Gibraltar at the forks, thus exposing the latter's canoe brigades, just as the pemmican supplies were being moved down the Assiniboine to meet the Nor'Westers returning from the annual council at Fort William. The HBC's Fort Douglas thus dominated the Red and denied passage both to the Nor'Westers and the provision boats of their Métis allies.

Brandon House, an HBC post on the upper Assiniboine, was captured by the Métis on 1 June 1816 under Cuthbert Grant, who then organized an escort to secure the pemmican supplies. Leaving the Assiniboine near Portage la Prairie, Grant and his men struck northeast across the plain to intercept the Nor'Westers on the Red. But they were, in fact, themselves intercepted by the HBC's local governor, Robert Semple, who with a score of his men, had unwisely ventured out of Fort Douglas. Although the clash was not premeditated, the Métis quickly enveloped Semple's party and he and 20 of his men were killed. The Métis suffered only one casualty.

In retaliation, Selkirk captured the Nor'Westers' primary base at Fort William and reoccupied Fort Douglas. Law suits and countersuits ensued. Only Selkirk's death in 1820 cleared the way for an end to the rivalry. As for the Métis, they came to see Red River as a place of settlement and for several decades were a permanent element in the colony.