How Does the Company Merger and Acquisition Process Work in Turkey? Competition Authority Approval

Mergers and acquisitions (M&A) cover transactions in which two or more companies combine under a single structure, or one company takes control of another; these processes require a multi-stage assessment from a legal, financial, and competition-law perspective.

Stages of the Process

The M&A process generally consists of the signing of a letter of intent, due diligence, preparation of the merger agreement and merger report, the general assembly resolution, obtaining Competition Authority approval where required, notification to creditors, and finally registration with the trade registry; depending on the parties' level of preparation, the process is generally completed within two to six months.

The Importance of Due Diligence

Although not expressly regulated by law, the due diligence process — examining the target company's financial, legal, and operational condition — is an indispensable stage of M&A transactions in practice; this examination reveals risks such as hidden liabilities, ongoing litigation, or missing permits, ensuring the purchase price and contract terms are correctly set.

Merger Under Law No. 6102

Under Article 136 et seq. of Turkish Commercial Code No. 6102 (TTK), a merger can take place either through one company absorbing another (merger by acquisition) or through companies combining within a newly formed company (merger by formation of a new entity); preparation of the merger agreement and merger report includes important safeguards protecting shareholders and creditors.

The Requirement for Competition Authority Approval

Under Law No. 4054 on the Protection of Competition, if the combined Turkish turnover of the companies party to the merger or acquisition, and the target company's turnover, exceed the thresholds set by the Competition Board, approval from the Board must be obtained before the transaction; transactions carried out without this approval are considered invalid and may be subject to an administrative fine.

The Approval Process and Timing

Mergers and acquisitions on which no action is taken within thirty days of the application to the Competition Authority are deemed approved; if the Board concludes the transaction would significantly reduce competition, it may proceed to a second-phase review, which can take considerably longer.

Practical Recommendations

Before entering an M&A process, assess whether the target company's turnover exceeds the competition approval thresholds; conducting due diligence with an experienced legal and financial advisory team significantly reduces the risks of the transaction.

This article is for informational purposes only and does not constitute legal advice. Please contact our team regarding your specific situation.