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Turunc, Linklaters, and GSI Advise Borsa Istanbul on Now-Closed Acquisition by EBRD

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The EBRD's acquisition of a 10 per cent shareholding in the Turkish stock exchange, first announced last June, closed on December 11, 2015. The Turunc law firm, Linklaters, and the GSI Attorney Partnership advised Borsa Istanbul.

Borsa Istanbul, majority-owned by the Turkish government and the sole exchange entity in the country, was created in 2013 by combining the Istanbul Stock Exchange, the Istanbul Gold Exchange, and the Turkish Derivatives Exchange. The exchange is expected to go public as part of the government’s plan to reshape Turkey’s capital markets. According to an EBRD press release, “as a shareholder in Borsa Istanbul, the EBRD will help with the preparations for a successful listing."

Previously, the EBRD undertook a pre-IPO investment in the Moscow Exchange, invested in the Bucharest Stock Exchange, and recently announced its intention to acquire shares in the Zagreb Stock Exchange. The Bank is also supporting SEE Link, an order-routing system established by the Bulgarian, FYR Macedonian, and Zagreb stock exchanges aimed at increasing liquidity and advancing standardisation among the connected bourses. 

EBRD First Vice President Phil Bennett signed the share purchase agreement alongside Borsa Istanbul’s CEO Tuncay Dinc at the bourse’s headquarters in Istanbul. Turkish Deputy Prime Minister Mehmet Simsek, who attended the ceremony, said: “We are here to celebrate the beginning of the strategic partnership between Borsa Istanbul and the EBRD. I am sure this is going to be a highly beneficial partnership. I would like to thank Borsa Istanbul’s management and the EBRD for this great milestone agreement. Borsa Istanbul is at the heart of our ambition to make Istanbul an international financial centre. As a founding member of the EBRD, the relations with the Bank are very important to us. Turkey has now become the largest recipient of EBRD finance. This demonstrates the Bank’s confidence in Turkey. Today’s agreement is the expression of this trust. The EBRD has great experience and knowledge in transforming other stock exchanges. This will help the development of Borsa Istanbul.”

Borsa Istanbul CEO Tuncay Dinc commented: “The region's most advanced exchange and most active international financial institution are cooperating to start an initiative that will shape the financial future of our region. The EBRD’s investment in Borsa Istanbul is an important call for international investors, demonstrating that Turkey and Borsa ?stanbul are safe destinations for international investments. In the near future we will be working with the EBRD on many projects including investment and technical support for exchanges in the region as well as on Borsa Istanbul’s IPO.”

EBRD First Vice President Phil Bennett said: “We welcome Turkey’s ambition to transform Istanbul into a dynamic hub for internationally significant financial services. With Borsa Istanbul as the catalyst for development of the Turkish capital markets, we believe that our partnership is a logical step towards fulfilling this ambition. As a shareholder, the EBRD will work to improve the efficiency and liquidity of Borsa Istanbul and help it become a leading exchange in terms of the number of listed companies and market capitalisation, reflecting the full potential of the Turkish economy.”

The EBRD claims to have invested EUR 6.8 billion in Turkey to date, through 170 projects in infrastructure, energy, agribusiness, industry, and finance. In 2015 the EBRD expects to invest over EUR 1.7 billion in Turkey, its top financing destination. 

"We are delighted to have advised Borsa Istanbul in this exciting transaction,” said Turunc Partner Kerem Turunc, who led his firm’s team on the deal. "Along with the Nasdaq/BISTECH project, this was the fourth major transaction in the last two years where Borsa engaged Turunc and we are very pleased to be at the heart of the transformation of Turkey's national stock exchange.” Earlier this year Turunc advised Borsa Istanbul advised on related agreements with the London Metal Exchange and the Hong Kong Exchanges and Clearing (reported by CEE Legal Matters on April 20, 2015), and on its partnership with the London Stock Exchange relating to the trading of futures and options on Borsa Istanbul indices and stocks on the London Stock Exchange Derivatives Market (reported by CEE Legal Matters on April 17). 

The Linklaters team was led by Partner Daniel Cousens.  

The GSI team consisted of Partner Emre Ulcayli, Senior Associate Elvan Zeynep Bilal, Attorney Mutlu Ozturk Yurdakul, and Associate Ezgi Korkmaz. 

Editorial Note: After this article was published, the Bezen & Partners law firm announced that it had advised the EBRD on the deal. The firm’s team was led by Senior Partner Nadia Cansun and Senior Associates Ugur Sebzeci and Can Ozilhan. 

Image source: Orlok / Shutterstock.com

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