Merger Communiqué is the primary legal instrument in assessing merger matters in Turkey. The Merger Communiqué sets forth the types of mergers and acquisitions which are subject Immigration Law Firm Turkey to the Competition Board’s review and approval. Therefore, M&A activities resulting in a change of control may be subject to the approval of the Competition Board.
Whether or not the parties may complete the merger before the remedies have been complied with depends on the nature of the remedies. Remedies may either be a condition precedent for the closing or may be designed as an obligation post-closing of the merger. As set out within the Remedy Guideline, the aimed effect of the divestiture will take place only and only if the divestment business is assigned to a suitable purchaser which is capable of creating an effective competitive power in the market. To make sure that the business will be divested to a suitable purchaser, the proposed remedy must include the elements that define the suitability of the purchaser in a way to cover the following requirements as well. Examples of the Board’s pro-competitive divestment remedies include divestitures, ownership unbundling, legal separation, access to essential facilities, obligations to apply non-discriminatory terms, etc.
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One should note that a due diligence report cannot realistically reflect the target company’s position with complete accuracy, and the best option is to prepare a disclosure letter. Acquiring companies must take M&A compliance as seriously as financial and operational DD. Regardless of the scope of an M&A transaction, unforeseen compliance risks may give rise to criminal and civil successor liability and may not only turn the whole deal into a gross fault but may also result in a considerable loss for the acquiring company; both financial and reputational.
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The BH makes every reasonable effort to ensure the accuracy and completeness of the information. When conducting the DD process, an acquirer enjoys the opportunity to verify the accuracy of the information provided by the seller, examine the target entity’s legacy and corporate structure, and evaluate its businesses, capabilities, assets, and financial performance as a whole. The Phase II review initiated in March, 2017 lasted approximately 7 months and several behavioral commitments have been proposed to eliminate the competition concerns that may arise in the relevant market.
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Therefore, M&A transactions require proper DD including risk and compliance matters, both prior to and following a transaction. Since the introduction of the Amendment Law, the majority of the newly introduced mechanisms and investigation methods were clarified via the enactment of secondary legislation. We have solid experience from advising companies, on their compliance with merger control rules in Turkey, as well as in other jurisdictions. As of May 4, 2022, a transaction that results in a change of control will be subject to merger filing to the TCA if any of the above turnover thresholds are exceeded by the transaction parties with the exception of “technology companies” as explained below.