Mergers and Acquisitions Services

These types of acquisitions (i.e., asset sale and share transfer) are generally exempt from value-added tax and stamp tax. Save for publicly held companies, under Turkish law, there is no disclosure requirements for companies and/or parties in an acquisition. If a publicly held company is involved in such a deal, the material events that may affect capital market instruments shall be disclosed by such company via the Public Disclosure Platform and its official website. The timing and content of the disclosure may vary depending on the parties’ intent and commercial considerations. However, the period may be determined based on several parameters (i.e., number of bidders and/or parties, volume of target company’s activity, due diligence and negotiation period, governmental approvals or permits). For instance, considering such factors if there is only one bidder for the target company’s acquisition, the closing may be completed in three to four months.

The parties have the ability to do a self-assessment individual exemption test, which is set out under Article 5 of Law No. 4054, on whether the JV meets the conditions of individual exemption . Notifying the transaction for individual exemption is not a positive duty of the parties, but it is an option granted to them. A notifiable merger or acquisition, not notified to, or not approved by, the Board, shall be deemed as legally invalid with all of its legal consequences.

Identifying the Effects of Mergers and Acquisitions on Turkish Banks Performances

Government authorities and professionals involved in the Turkish M&A market are still struggling to master the new mechanisms introduced by these changes and are trying to clarify the grey areas. The freedom of contract principle applies if the parties comply with the applicable regulations. On the other hand, cross-border M&A should also be evaluated from the tax law perspective in line with international double taxation treaties.

The wording of Article 16 of Law No. 4054 does not give the Board discretion on whether to impose a monetary fine in case of a violation of suspension requirement. In other words, once the violation of the suspension requirement is detected, the monetary fine will be imposed automatically. As explained above, the jurisdictional thresholds under Turkish merger control regime are solely based on the turnover figures of the Parties. Here at KILIÇ & Partners law firm Istanbul, we are well versed in the complexities involved when merging or acquiring a business abroad. We can provide legal support to both Turkish and foreign companies wishing to invest or consolidate their market position, with a Merger or Acquisitions in Turkey or abroad, varied in value and complexity. Our law firms team in Istanbul, consult on strategic and corporate restructuring, including share transfers, sale of enterprises, company mergers, joint ventures, take-overs, tender offers, etc, within a wide spectrum of regulated industries.

Turkish businesses FDI outflow rises 10 times in 15 years: Index

Ensuring that employment agreements, third-party agreements and consent forms are compatible with cybersecurity policies and practices. 3.1 Are there any jurisdiction-specific points relating to the following aspects of the target that a buyer should consider when conducting due diligence on the target? Commercial/corporate, Financial, Litigation, Tax, Employment, Intellectual property and IT, Data protection, Cybersecurity and Real estate. The potential effects of the transaction for the agreements and liabilities of the target .

Foreign-to-foreign mergers are covered by Law 4054 on Protection of Competition to the extent that they affect the relevant markets within the territory of Turkey. Regardless of the parties’ physical presence in Turkey, sales in Turkey may trigger the notification requirement to the extent that the turnover thresholds are met. Article 2 of Law 4054 sets out the effects criterion – that is, whether the undertakings concerned affect the goods and services markets in Turkey. In 2021 a total of 173out of 309 transactions notified to the Board were foreign-to-foreign transactions. Under Turkish law, agreements may be subject to stamp tax, since documents that indicate a particular price fall within the scope of the Stamp Tax Law. The highest price indicated in the relevant document will be taken into account in calculating the exact amount of stamp tax, and accordingly, specialist advice should be obtained, as the application of the stamp tax to the specific transaction can be very important.

1 Merger Control as Part of M&A Transactions

We believe that Turkey’s efforts and determination to comply with EU law as a part of the EU accession process will result in upcoming legislative reforms. As outlined in the 2020 report on Turkey prepared by the European Commission, reforms to the legislation on domestic and cross-border mergers and acquisitions may be introduced to bring the Turkish legislation into line with the EU acquis. We do not anticipate the introduction of heightened scrutiny over foreign direct investment, due to the general principle of equality between Turkish and foreign investors outlined in Article 3 of the Foreign Direct Investment Code.

This amendment aims to allow a more reliable assessment of unilateral and cooperation effects that could arise as a result of mergers or acquisitions. With this new test, the Turkish Competition Board will be able to prohibit not only transactions that may create a dominant position or strengthen an existing dominant position, but also those that could significantly impede competition. As a matter of Article 7 of Law Turkish Family Lawyer No.4054 and Article 13 of the Communiqué, mergers and acquisitions which do not create or strengthen a dominant position and do not significantly impede effective competition in a relevant product market within the whole or part of Turkey, shall be cleared by the Board. It is also noteworthy that the Amendment Communiqué does not seek a Turkish nexus in terms of the activities which render the threshold exemption.

These special methods apply to banks, special financial institutions, leasing companies, factoring companies, securities agents and insurance companies. Transactions that are closely connected in that they are linked by conditions or take the form of a series of transactions in securities taking place within a reasonably short period of time are treated as a single concentration . The turnover of jointly controlled undertakings will be divided equally by the number of controlling undertakings. The Amending Communiqué also reemphasizes the Authority’s continuing mission to enhance digitalization. In its announcement, the Authority heralds that it will soon turn all filings into electronic filings.