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Content last updated: 10-10-2019

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  • Merger Control Regime
  • Merger Screening
  • Merger Filing

1. Overall description of merger control regime

1.1 Supranationality

1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?

No.

1.1.2 Is the jurisdiction itself a supranational jurisdiction?

No.

1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?

Not applicable.

2. Nature of merger control regime

2.1 Mandatory or voluntary

2.1.1 Is filing mandatory or voluntary?

Filing is mandatory if the thresholds described under the Merger Screening Section 2.3.1 are met.

2.2 Suspensory effect

2.2.1 Must completion of the transaction await clearance by the relevant authorities?

Transactions shall be notified to the Turkish Competition Authority prior to the implementation/completion and following the conclusion of the agreement, the announcement of a public bid, or the acquisition of controlling interest.

A notifiable transaction which is not cleared by the Turkish Competition Board would be legally invalid if implemented in Turkey with all its consequences.

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

A transaction is caught by the merger control rules if it brings a change of control on a lasting basis resulting from:

a) the merger of two or more previously independent undertakings or parts of undertakings; or

b) the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings.

Communiqué No. 2010/4 on Mergers and Acquisitions Calling for the Approval of the Competition Board sets out four exemptions from the merger control notification:

a) intra-group transactions and other transactions which do not lead to a change in control;

b) temporary acquisitions for resale purposes by undertakings whose ordinary operations involve transactions with securities, provided that any voting rights are not used to affect the competitive policies of the issuer of the securities;

c) acquisition of control by a public institution or organization by operation of law and due to divestment, dissolution, insolvency, suspension of payment, bankruptcy, privatization, or a similar reason; and

d) transactions that are a result of inheritance.

In addition, the mandatory notification obligation stipulated in the competition act does not apply if the sectoral share of the total assets of banks subject to merger or acquisition does not exceed 20%.

1.2 Joint ventures

1.2.1 What types of joint ventures are caught by the merger control rules?

The creation of joint ventures performing on a lasting basis all the functions of an autonomous economic entity resulting in permanent structural market change, i.e. a so-called "full function" joint venture.

1.3 Definition of "control"

1.3.1 How are the concepts of "control" and "change of control" defined?

"Control" is defined as the possibility of exercising decisive influence on an undertaking by rights, contracts or any other means, either separately or in combination, having regard to the considerations of fact or law involved. Decisive influence can be summarised as the ability to impose, or block, an undertaking’s budget, business plan, the appointment, removal, or terms of employment of senior management (typically the CEO), significant investments, or other matters which may be deemed to be strategic decisions.

It has to be decided on the facts in each case, whether there is a possibility of exercising decisive influence over an undertaking. Decisive influence can be de jure in the form of acquisition of the majority of the voting rights or through special rights; or de facto based on a historic pattern of attendance at annual general meetings.

Only transactions that bring a lasting "change of control" to the undertakings concerned and in the structure of the market are covered by the Turkish merger control rules. Thus, transactions resulting only in a temporary change of control, such as for instance a transitory transaction, are not covered.

Control must be assessed for each potentially controlling entity (shareholders, parents, or others with relevant links to the undertaking). If no party has the ability to exercise decisive influence, the undertaking is not controlled. If only one party has the ability to exercise decisive influence, the undertaking is under that party’s sole control. If more than one party has the ability to exercise decisive influence (positive or negative), the undertaking is under those parties’ joint control.

A reduction in the number of controlling parties usually is not notifiable, including a movement from joint or sole control to no control (e.g. in an IPO where the shares become widely disbursed). The sole exception to this is a change from joint control to sole control which is notifiable.

1.4 Minority shareholdings

1.4.1 Are minority and other interests less than control caught by the merger control rules?

Acquisitions of minority or other interests that do not lead to an acquisition of control do not fall within the Turkish merger control rules and do not require clearance from the Turkish Competition Authority.

2. Establishing jurisdiction for notification of mergers

2.1 Merging parties/undertakings concerned

2.1.1 Which undertakings are considered parties to the merger ("undertakings concerned") in the various types of transactions identified under Section 1.1.1 and 1.2.1.

In a merger, the "undertakings concerned" are each of the merging entities.

In an acquisition, each of the acquirer and the target are considered undertakings concerned.

In the case of acquisition of joint control of a newly created joint venture, the undertakings concerned are each of the undertakings jointly acquiring control. The same applies where one undertaking contributes a pre-existing subsidiary or a business (over which it exercises sole control) to a newly created joint venture.

In the case of acquisition of joint control over a pre-existing undertaking or business, the undertakings concerned are each of the undertakings acquiring joint control, and the pre-existing acquired undertaking.

In case of entry of a new shareholder in a pre-existing joint venture, which leads to a change in the quality of control for the remaining controlling shareholders, the undertakings concerned are the newly entering controlling shareholder alongside with the remaining controlling shareholders.

In case where a pre-existing, full-function joint venture acquires control over another undertaking, the undertakings concerned are the joint venture (i.e. not including the parent companies) and the target undertaking. Where a joint venture is mere acquisition vehicle, the undertakings concerned are in such situation the parent companies to the joint venture and the target undertaking.

In case of change from joint control to sole control, the undertakings concerned are the undertaking acquiring the sole control and the joint venture. The other "existing" shareholder (i.e. the seller) is not considered an undertaking concerned.

Note that in Turkey, the “undertakings concerned” is a different definition from the parties whose turnover is taken into account, i.e. the “transaction parties”. See Section 3.3.2 below for more information.

2.2 Date for establishing jurisdiction

2.2.1 Which date is relevant for concluding whether the transaction is notifiable?

Whichever date is earlier of the date of conclusion of the binding legal agreement; the announcement of a public bid or the acquisition of a controlling interest.

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

If either of the three alternative sets of thresholds is met, the transaction must be notified to the Turkish Competition Authority:

The general threshold:

a) the combined aggregate Turkish turnover of the undertakings concerned (including their corporate groups) in the last financial year exceeded TRY 100,000,000; and

b) the turnover of each of at least two of the undertakings concerned (including their corporate groups) in Turkey in the last financial year exceeded TRY 30,000,000.

Alternative thresholds for mergers and acquisitions:

The thresholds for acquisitions:

a) the turnover in Turkey of the target, or deriving from the transferred assets, in acquisitions in the last financial year exceeded TRY 30,000,000, and

b) the global turnover of at least one of the other undertakings concerned (including their corporate groups) in the last financial year exceeded TRY 500,000,000.

The thresholds for mergers:

a) the turnover in Turkey of any of the merging parties (including their corporate groups) in the last financial year exceeded TRY 30,000,000 and

b) the global turnover of at least one of the other merging parties (including their corporate groups) in the last financial year exceeded TRY 500,000,000.

2.3.2 For each threshold, can the threshold be triggered by only one party having local turnover?

The alternative thresholds can be triggered if only the target(s), or only one merging party, has sufficient Turkish turnover, provided that at least one of the other undertakings concerned has sufficient global turnover.

It is possible for the alternative threshold to be triggered by two targets having a combined turnover of TRY 30,000,000 if the two targets are controlled by the same undertaking (i.e. would belong to the same economic unity). Otherwise, two targets with different controlling structures pre-closing would need to be treated as separate filings.

2.3.3 For each threshold, can the threshold be triggered without any party having local turnover?

None of the thresholds can be triggered without any parties having a Turkish turnover.

2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?

Transactions falling below the above thresholds may not be investigated by the Turkish Competition Authority.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

There are not sector-specific or other ex-ante merger control rules in Turkey.

2.4.2 Are any such schemes mandatory or voluntary?

Not applicable.

2.5 Foreign-to-foreign mergers

2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?

Transactions meeting the above thresholds have to be notified to the Turkish Competition Authority, regardless of whether the undertakings concerned are domiciled outside Turkey.

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.1 Relevant turnover

3.1.1 How is turnover defined (e.g. is income from other sources than "ordinary activities to be included, and how are rebates, taxes, internal turnover etc. treated)?

The relevant turnover to be taken into account is the net turnover related to the sale of goods and/or services in the ordinary course of business exclusive of group internal sales. 

In the case of acquisitions of part of a business, or specific assets, only the turnover attributable to the part of the business or the assets being acquired is relevant.

Transactions between the same parties (or undertakings under common control with the parties) or by the same undertaking in the same relevant product market that occur within three years of each other will be considered together for the threshold analysis.

3.1.2 Identification and link to any official rules, guidance etc. on how to calculate turnover?

Guidance to the calculation of turnover can be found in the Turkish Competition Authority’s Guidelines on Undertakings Concerned, Turnover and Ancillary Restraints in Mergers and Acquisitions.

The Guidelines on Undertakings Concerned, Turnover and Ancillary Restraints in Mergers and Acquisitions can be found on:

https://www.rekabet.gov.tr/Dosya/guidelines/5-pdf

3.2 Relevant period for calculation of turnover

3.2.1 Which financial year(s) is relevant for the calculation of turnover?

The turnover should be based on the latest financial year preceding the date of the notification, or, if this cannot be calculated, the financial year closest to the date of notification.

3.2.2 Should adjustments be made for e.g. divestitures, acquisitions, closings and other changes of the economic reality of the undertaking concerned made after or during the relevant financial year?

Adjustments must be made for any divestitures/acquisitions made during/after the latest financial year. Turnover stemming from such divested/acquired assets should be excluded/included.

3.3 Relevant undertakings for the calculation of turnover

3.3.1 The "undertakings concerned", i.e. which parties?

See Section 2.1.1 above.

3.3.2 The undertakings whose turnover is taken into account?

The undertakings whose turnover is taken into account are the "undertakings concerned" together with their corporate group(s).

3.3.3 Shall the turnover of the existing seller be included in the target's group turnover?

The seller's turnover shall not be included in the target's group turnover.

3.4 Geographical allocation of turnover

3.4.1 The principles for the geographical allocation of turnover?

In general, the turnover should be allocated geographically based on where the customer was located at the time of the turnover generating transaction, i.e. typically where the goods were actually delivered or services actually provided.

Investment and financial income are allocated to the jurisdiction where the income is received (booking location). Insurance income is allocated to the location of the insured party (not necessarily the location of the insured asset).

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

Not applicable.

3.6 Calculation of other thresholds

3.6.1 The principles for calculation of metrics for other thresholds (e.g. transaction value, market share, share of supply etc.)?

Not applicable.

3.7 Special rules

3.7.1 Do any special rules or principles apply to the calculation, allocation etc. of turnover, assets etc. for specific undertakings (e.g. State-owned undertakings, investment funds, credit and financial institutions, insurance companies, financial holding companies, others)?

Specific rules apply to the calculation of turnover for investment funds; state-owned undertakings; financial institutions and insurance undertakings, which can be found in the Guidelines on Undertakings Concerned, Turnover and Ancillary Restraints in Mergers and Acquisitions.

3.7.2 Does any exemptions apply?

Not applicable.

1. Practical information

1.1 Responsibility for filing

1.1.1 The parties responsible for filing?

There is no obligation to make a sole or joint filing in Turkey. Each party to the transaction can make the notification:

each merging party;

the party or parties acquiring “control” over the target; or

the parents of a newly-formed full-function joint venture.

In case of filing by one of the parties, the filing party must notify any other parties of the filing.

1.2 Deadlines for filing

1.2.1 Are there any mandatory deadlines for filing, and, if so, how these are calculated?

There are no mandatory deadlines for filing. 

However, a transaction meeting the above thresholds has to be notified to the Turkish Competition Authority prior to its implementation and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest.

1.2.2 Are there any sanctions for not filing within the deadlines?

If the undertakings concerned violate the suspension requirement (i.e. do not notify a notifiable transaction), a turnover-based administrative fine will be imposed at a fixed rate of 0.1% of the annual Turkish turnover of the relevant undertaking (i.e. each merging parties, in case of a merger, and the acquirer in case of an acquisition) generated in the financial year preceding the fining decision. The 2019 minimum fine is TRY 26,027 and is revised annually.

In case a notifiable transaction is not notified, and if there is a risk that the relevant transaction might be viewed as problematic under the dominance test applicable in Turkey, the Turkish Competition Authority is authorized to (i) ex officio launch an investigation into a transaction that has closed before clearance; (ii) order structural and behavioural remedies to restore the situation to where it was before the closing (such as ordering any shares or assets acquired to be returned); and (iii) impose a turnover-based fine (of up to 10% of the parties’ annual Turkish turnover) on all undertakings concerned. 

Employees and/or managers of the parties that had a determining effect on the creation of the violation may also be fined up to 5% of the fine imposed on the companies.

1.3 Early filing

1.3.1 Is it possible to file before the signing of merger agreement?

A notification may be submitted where there is evidence that demonstrates the parties’ intention to finalize the transaction (such as letter of intent, memorandum of understanding, term sheet, final form of transaction document), or a signed copy of the main transaction document (e.g. share purchase agreement, joint-venture agreement, merger agreement).

1.4 Filing fees

1.4.1 Are there any fees for filing, and, if so, please describe how such fees are calculated?

There are no filing fees.

1.4.2 When must the filing fee must be paid?

Not applicable.

1.5 Publicity

1.5.1 When and in which format will the authority publish receiving a notification?

A short description of the transaction is published on the Turkish Competition Authority’s website, including the identities of the parties and the nature of the transaction and therefore, a transaction would be no longer confidential once notified.

The text to be published on the website must be prepared by the parties and submitted in the notification form.

1.5.2 How will the authority in general handle the case publicly, e.g. will it usually comment in the media, send out press releases etc.?

The Turkish Competition Authority does not send out press releases or comment on any notified merger/acquisition transactions.

The reasoned decision of the Turkish Competition Board is published on its website upon redaction of parties’ confidential information.

1.5.3 Will third parties be able to review the notification?

Third parties cannot review the notification but may send their opinions and/or views regarding the transaction to the Turkish Competition Authority.

2. Procedure and timing

2.1 Normal and simplified procedures

2.1.1. Does the regime allow for a simplified (fast track) procedure, and, if so, what are the criteria for using the simplified procedure?

There is no fast track procedure in Turkey. A simplified procedure notification which requires significantly less information is available for:

a) transactions where a party acquires sole control of an undertaking it already jointly controls; and

b) transaction where combinations in horizontally overlapping markets in which no combined aggregate market share equals or exceeds 20%; and neither party has a market share equal to or exceeding 25% in a market upstream or downstream of another party.

2.2 Procedural stages (cf. timetable below)

2.2.1 The various stages of (i) a simplified procedure and (ii) a normal procedure?

In cases described under 2.1.1 above, it is not necessary to provide the information requested under Sections 6 (information on affected markets), 7 (market entry conditions and potential competition) and 8 (efficiency gains) of the notification form.

All merger procedures before the Turkish Competition Board (both simplified and normal) are initiated by the formal filing.

The Turkish Competition Authority will publish a brief description of the transaction on its website on the following day of the formal filing. 

When the formal notification is submitted to the Turkish Competition Authority, the clock starts running on the case team's and the Turkish Competition Board’s "Phase I" period which lasts up to 30 days. 

During the Phase I review period, the case teams and/or the Turkish Competition Board may request information from the parties, their suppliers and/or customers and other market players if necessary.

If the case teams and/or the Turkish Competition Board request additional information within the Phase I review period, then the clock stops and the 30-day review period re-starts when the additional information is submitted.

If a transaction is taken into Phase II review (i.e., if it was found to be problematic under the applicable dominance test), the review turns into an investigation which normally lasts up to 6 months (including submission of defences) and could be extended once for an additional 6 months (to a maximum of 12 months in total), if deemed necessary.

When initiating the Phase II investigation, the Turkish Competition Board will also serve a Phase II notice to the parties explaining in detail its findings and conclusions. Following the Phase II notice, the notifying parties will submit their written defenses to the Turkish Competition Board.

The Turkish Competition Board will then normally continue its investigations and contact third parties in the market and send further requests for information to the notifying parties.

Remedies can be offered during the Phase II review. Based on the nature and quality of the proposed remedy, i.e. if the case handlers find the remedies sufficient to eliminate the concerns, the case handlers could prepare their report without using the entire Phase II review period and submit it to the Turkish Competition Board’s agenda urgently.

2.2.2 Is pre-notification contact with the relevant authorities customary/obligatory/encouraged/etc.?

Pre-notification contact with the Turkish Competition Authority is not possible.

2.2.3 Are there any sanctions for not filing within the deadlines?

Please see Section 1.2.2 above.

2.3 Timetable (cf. timetable below)

2.3.1 The statutory timetable/deadlines for review of a notification?

Phase I:

Starting from the first calendar day after the formal filing has been submitted by the notifying parties, the Turkish Competition Authority has 30 calendar days to decide whether to clear the transaction in Phase I or open a Phase II investigation. In case the Board does not respond to or take any action for the submission within 30 calendar days following a submission, the transaction automatically clears and becomes legally valid.

In case of a formal additional information request, the 30-day review period will be cut and re-start when the additional information is submitted. 

Phase II:

The Phase II investigation period is 6 months, which can be extended for another 6 months once. In practice, Phase II review could potentially take around 13 months starting from the initial submission of the merger filing to the Competition Authority

2.3.2 Can the statutory timetable/deadlines be suspended ("stop-the-clock"), and if so under which conditions?

The Turkish Competition Authority may request any additional information from all parties and the parties’ customers, competitors or suppliers, if it deems it necessary. In case of a formal additional information request, the 30-day review period will be cut and re-start when the additional information is submitted.

It is typical for the review period to be re-started in this way at least once, even in straightforward cases.

2.3.3 If pre-notification with the relevant authorities contact is possible/customary, how long will the duration of such contact usually be?

Not applicable.

3. Format and content of notification

3.1 Notification forms

3.1.1 Must the notifying parties use any mandatory notification forms, e.g. for simplified and normal procedures, and, if relevant, add a link to the relevant forms?

The Turkish Competition Authority has a mandatory notification form which is attached to the Communiqué No. 2010/4 on Mergers and Acquisitions Calling for the Approval of the Competition Board. 

Please see: https://www.rekabet.gov.tr/Dosya/communiques/43-pdf

3.2 Supporting documentation

3.2.1 List of the supporting documentation which must as a minimum be submitted along with the notification?

Cf. checklist below.

3.3 Originals, legalization and apostillation (cf. checklist below)

3.3.1 List of all documents which must be submitted in original/legalized versions and whether any documents must be apostilled?

If the notification is made by proxy and the power of attorney is issued outside of Turkey, the power of attorney must be notarized and apostilled abroad and notarized in Turkey.

The Turkish translations of all transaction documents relevant to the control assessment must be presented to the Turkish Competition Authority. In cases where the Turkish translation is not made by a sworn translator, each page of the Turkish version of the relevant documents must be certified by the undertaking’s authorized officer or representative.

3.3.2 If the merger regime has a mandatory filing deadline, must all the documents identified under Section 3.3.1 be submitted within this deadline?

Not applicable.

3.4 Language

3.4.1 Which languages may be used for drafting and filing a notification?

The notification must be made in Turkish.

The most recent annual reports and accounts of the transaction parties do not need to be translated; the Turkish Competition Authority accepts these in their original language.

3.4.2 Does translations have to be certified/legalized and apostilled?

The translations of the documents need to carry the stamp of a sworn translator. In cases where the Turkish translation is not made by a sworn translator, each page of the Turkish version of the relevant documents must be certified by the undertaking’s authorized officer or representative.

Statutory timetable

Step Description Time
1

Pre-notification

Pre-notification contact with the Turkish Competition Authority is not possible.

Not applicable.

2

Phase I

All merger procedures before the Turkish Competition Board (both simplified and normal) are initiated by the formal filing. The Turkish Competition Authority will publish a brief description of the transaction on its website on the following day of the formal filing. When the formal notification is submitted to the Turkish Competition Authority, the clock starts running on the case teams and the Turkish Competition Board’s "Phase I" period. 

During the Phase I review period, the case teams and/or the Turkish Competition Board may request information from the parties, their suppliers and/or customers and other market players if necessary.

Starting from the first calendar day after the formal filing has been submitted by the notifying parties, the Turkish Competition Authority has 30 calendar days to decide whether to clear the transaction in Phase I or open a Phase II investigation. In case the Board does not respond to or take any action for the submission within 30 calendar days following a submission, the transaction automatically clears and becomes legally valid.

In case of a formal additional information request, the 30-day review period will be cut and re-start when the additional information is submitted.

3

Phase II

If a transaction is taken into Phase II review (i.e., if it was found to be problematic under the applicable dominance test), the review turns into an investigation.

When initiating the Phase II investigation, the Turkish Competition Board will also serve a Phase II notice to the parties explaining in detail its findings and conclusions. Following the Phase II notice, the notifying parties will submit their written defenses to the Turkish Competition Board.

The Turkish Competition Board will then normally continue its investigations and contact third parties in the market and send further requests for information to the notifying parties.

Remedies can be offered during the Phase II review. Based on the nature and quality of the proposed remedy, i.e. if the case handlers find the remedies sufficient to eliminate the concerns, the case handlers could prepare their report without using the entire Phase II review period and submit it to the Turkish Competition Board’s agenda urgently.

The Phase II investigation period is 6 months, which can be extended for another 6 months once. In practice, Phase II review could potentially take around 13 months starting from the initial submission of the merger filing to the Competition Authority.  

  • Step 1 1
  • Step 2 2
  • Step 3 3
  • Not applicable
  • 30 days
  • 6 + 6 months

Checklist

List of the supporting documentation which must as a minimum be submitted along with the notification.

Supporting documentation

This content was delivered
and last updated on 10-10-2019 by
Contact Person
Togan Turan, Partner
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