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Significant Amendments in the Communiqué on Competition Authority’s Approval in M&A Transactions

Significant Amendments in the Communiqué on Competition Authority’s Approval in M&A Transactions

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Significant amendments were introduced to the Communiqué of the Competition Authority on Mergers and Acquisitions Requiring Authorization of the Turkish Competition Board, numbered 2010/4, with the Communiqué published in the Official Gazette on March 4, 2022. In this respect, while the turnover thresholds taken into account in mergers and acquisitions to determine whether Competition Board’s approval is necessary are increased, exceptional rules are adopted in relation to transactions involving technology companies. These amendments will become effective two months after their publication, i.e., as of May 4, 2022.

Increase of Turnover Thresholds

Pursuant to the new provision, in cases where:

  • Total turnovers of the transaction parties in Turkey exceed 750 million TL, and turnovers of at least two of the transaction parties in Turkey each exceeds 250 million TL, or
  • The asset or activity subject to acquisition in acquisition transactions and at least one of the parties of the transaction in merger transactions have a turnover in Turkey exceeding 250 million TL and the other party of the transactions has a global turnover exceeding 3 billion TL

the Board’s authorization will need to be obtained for the validity of the underlying transaction. If these turnover thresholds are not exceeded, competition clearance will not be required.  

Before the amendment, the 250 million TL threshold was 30 million TL, the 750 million threshold was 100 million TL, and the 3 billion TL threshold was 500 million TL. In this regard, the amendment introduces a significant increase in turnover thresholds.

Exceptional Threshold Rules in Tech M&As  

For mergers and acquisitions involving technology undertakings providing services to users in Turkey, the aforementioned 250 million TL turnover thresholds will not be sought. That means, if the total turnover of the transaction parties in Turkey exceeds 750 million TL or the global turnover of at least one of the transaction parties exceeds 3 billion TL, the Competition Board must be notified before taking over a technological company. The term “technology undertakings” is defined for the first time and includes gaming, software, online television, financial technology, biotechnology, health technology, e-commerce, cryptocurrency, artificial intelligence, and all other technology companies. Accordingly, most tech M&A deals would be subject to the inspection of the Competition Authority.

Other Amendments

In addition, the Notification Form on Mergers and Acquisitions attached to the relevant Communiqué has been updated. From now on, the Board must be notified with the updated form for transactions subject to authorization. Finally, whereas the respective transaction could previously be notified by hand or by mail, it will soon be possible to do so via e-Government system.

By Zahide Altunbas Sancak, Partner, Guleryuz & Partners

Guleryuz & Partners at a Glance

Güleryüz & Partners Attorneys at Law is an Istanbul based law firm offering a broad scope of high-quality legal services to domestic and multinational clients across a wide range of regulated and non-regulated industries. The Firm is comprised of energetic young professionals, led by experienced lawyers with a proven track record of working in the most demanding environments possible. Our team has comprehensive experience in serving clients in connection with a full breadth of Turkish law matters including Litigation & Dispute Resolution, M&A, Wealth Management & Family Businesses, General Corporate & Contract Law, Real Estate & Construction, Enforcement and Bankruptcy Proceedings, Labor Law, Administrative Law, and Anti-Corruption & White-Collar Crimes. 

Our core business culture is centered on integrity, dedication to clients’ needs, and excellence of legal advice and services. Therefore, our primary objective is to ensure the most personalized and reliable legal service for our clients. In pursuit of this objective, the international academic backgrounds of our partners at prestigious universities in USA, UK and Germany coupled with more than ten years of past experience at top tier Turkish law firms enhances the visionary practice of the Firm.

We blend our practical expertise with our outstanding grasp of legal theory in order to provide our clients with legal services of unmatched quality. Our clients range from multinational companies where we provide a level of attention normally only expected from in-house counsels in order to timely manage every aspect of the clients’ legal needs, to individuals for whom we make their objectives ours in order to provide comfort and ease of life. While we always put client service above all, we are proud to be on a quest to make reliable legal information available for everyone. Hence, we are constantly authoring articles on a broad scope of legal topics for respectable publications including Bloomberg Businessweek and the monthly magazine TR Monitor.

While Güleryüz & Partners operates mainly in Turkish and English, we are capable of providing legal services in French, German and Russian as well. The Firm also has an associated office in Ankara.

You can learn more about the Firm at guleryuz.av.tr