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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

We are Güleryüz Partners, an Istanbul based law firm, offering high-quality legal services to domestic and multinational clients.

Our team consists of energetic young professionals who are led by talented partners with strong academic backgrounds at prestigious universities in the USA, UK, and Germany, coupled with vast market experience exceeding a decade at top tier Turkish law firms. All our associates are fluent in English and provide legal advice in additional languages such as German and French.

Our practice ranges from complex disputes to sophisticated M&A and finance transactions. We provide niche legal services in a wide range of legal areas such as litigation and dispute resolution, local and cross border M&As, banking, finance and capital markets, venture capital investments and start-ups, and compliance and corporate governance (including data privacy, anti-corruption and white-collar crime, AML, and sanctions).

We value strong communication and information flow among our departments for the perfection of our legal services. This interdepartmental coordination enables us to take a more client-centric approach and to better understand and cater for the client needs. Our business perspective goes beyond providing excellent legal advice to our clients; we also collaborate with them as their business partners and offer them the entire legal ecosystem that they can thrive their business.  

As Güleryüz Partners, we heavily invest in our pro bono projects in Turkiye and work together with institutions, foundations, and other organizations to provide legal advice to the persons in need of help, while acknowledging the high costs usually associated with high quality legal services limit the access to justice for many people.

We also pride ourselves on fostering and promoting a diverse, equitable and inclusive work environment where every individual feels valued and respected.

For further information, you may visit our website at www.guleryuz.av.tr.