The Communiqué No. 2010/4 (the "Communiqué") requires approval of the Competition Board (the "Board") on mergers, acquisitions and privatisation transactions that fall within its scope in order for those to be legally valid. The Turkish Competition Authority releases data relating to transactions requiring the Board’s clearance and examines those transactions in an annual report. In this respect, the transactions reviewed by the Board in 2023 were disclosed to public on January 5, 2024 through the Mergers and Acquisitions Overview Report (the "Report") [available in Turkish only].
The turnover thresholds and other rules applicable to mergers and acquisitions requiring the Board's approval can be found in our article entitled Significant Amendments in the Communiqué on Competition Authority's Approval in M&A Transactions.
A Total of 217 Merger and Acquisition Transactions Reviewed
The Competition Authority examined a total of 217 merger and acquisition transactions throughout the year 2023. Among these, 94 involved target companies of Turkish origin with the total value amounting to 162 billion 555 million Turkish Liras. The key data for these 217 transactions are as follows:
- 48 mergers and acquisitions with a value of 81 billion 924 million Turkish Liras, in which all parties were companies of Turkish origin,
- 41 mergers and acquisitions with a value of 67 billion 293 million Turkish Liras, with at least one of the parties in each of the 41 mergers and acquisitions being Turkish and foreign companies; and
- 118 merger and acquisition transactions with a value of 57 trillion 375 billion Turkish Liras, in which all parties were foreign companies.
Accordingly, while the total value of all transactions examined correspond to approximately 57 trillion 524 billion Turkish Liras, around 57 trillion 375 billion Turkish Liras of this amount originates from transactions with all parties are foreign. Although the number of transactions examined decreased by 12% compared to the previous year, the noteworthy aspect is the 57% increase in transaction value in dollar terms.
In 2023, only one mergers and acquisition transaction requiring a more in-depth examination of its impact on the competitive landscape has been subjected to the final review by the Board. The report indicates that the examination process is still ongoing.
Germany and the Netherlands Rank in First Place Among Foreign Investors
In the Report, the investment transactions of foreign investors in Turkish companies were scrutinized, revealing that foreign investors invested a total of approximately 68 billion Turkish Liras (USD 2.86 billion) in Turkish companies in 35 different transactions, with investors from Germany and the Netherlands leading the way. The report highlights that, compared to the year 2022, where investors from the United Arab Emirates and the Netherlands led with approximately 43 billion Turkish Liras (USD 2.59 billion) in 36 transactions, there is a relatively slight increase in transaction value. The Report further notes that the total value of transactions carried out by foreigners abroad amounted to 57 trillion 362 billion Turkish Liras, which includes 113 transactions reported to the Competition Authority.
In addition, in 2023, among the industries that attracted global investments, computer programming, consultancy and related activities, programming and publishing, food production, production of chemical products, production of basic pharmaceutical products, and wholesale and retail trade and repair of motor vehicles and motorcycles were the most prominent.
Highest Transaction Value Is in the Animal Production Industry
According to the Report, in 2023, the sector with the highest transaction value was “animal production”, while the sectors with the highest number of transactions were “electric power generation, transmission and distribution” and “computer programming, consultancy and related activities”. In contrast to 2022, where both the highest number of transactions and the highest transaction value were identified in the “electricity generation, transmission and distribution”, it is noteworthy that the transaction value of animal production surpasses the electricity sector in the last year.
In terms of mergers and acquisitions transactions where the target company is of Turkish origin, the first sector with the highest transaction volume is “agriculture, forestry and fishing” with 36.8 billion Turkish Liras, followed by “transport and storage” with 34.3 billion Turkish Liras, and the third place is “wholesale and retail trade; repair of motor vehicles and motorcycles” with 30.1 billion Turkish Liras.
The Leader in Privatisation Became the Manufacture of Apparel
According to the Report, only three privatisation transactions were subject to the Board’s review in the year 2023. These privatization transactions were carried out in relation to the (i) furniture, (ii) textile products, (iii) apparel, and (iv) manufacturing industries.
Among these privatization transactions, the sector with the highest transaction value is "manufacture of apparel" with an approximate value of 268 million Turkish Liras. The Report indicates that the share of privatisation transactions in total Turkish transactions in 2023 is approximately 0.026%. This represents a significant decrease in privatization deals compared to the 16% share reported for the year 2022.
By Zahide Altunbas Sancak, Partner, and Beliz Boyalikli, Associate, Guleryuz Partners