110404-MERGERS AND ACQUISITIONS-Yamaner - AllIURIS

MERGERS AND ACQUISITIONS 

IN TURKEY 

Legal basis 

Merger and acquisition transactions have not 

been regulated under a separate law, but 

depending on the nature of the transaction, 

different laws and regulations become 

applicable. For example while asset transfers 

are mainly subject to the provisions of 

Turkish Civil Code and Turkish Commercial 

Code, share transfers are subject to the 

Turkish Commercial Code, but if the 

company’s shares are traded at the Stock 

Exchange, the provisions of Turkish Capital 

Markets Law has to be obeyed. On the other 

hand merger of the companies has been 

regulated by the Turkish Commercial Code 

and Turkish Code of Obligations. In 

addition to these main laws Turkish Labor 

Act, Turkish Competition Law, Tax Laws 

contain provisions governing mergers and 

acquisitions. 

Since Turkish Commercial Code and 

Turkish Code of Obligations recently 

changed, but not have entered into force yet, 

we will point out only the current legal 

status of the merger and acquisitions. 

Mergers and acquisitions according to the 

new Turkish Commercial Code and Turkish 

Code of Obligations will be explained in 

detailed in an another article in the 

upcoming issues. 

Applicable structures 

I. Mergers 

Handan Oktay-Weldishofer 

LLM (Mainz/Germany) 

Partner 

Two types of mergers could be 

accomplished according to Turkish 

Commercial Code: Consolidation and 

Absorption. 

Two or more companies would be merged 

by means of a “consolidation” if they merge 

under a newly established company. If two 

or more companies are merged into another 

existing company, this would be defined as 

“absorption”. 

According to the Turkish Commercial Code, 

merger is possible only if the legal status of 

the companies are the same. For example a 

joint stock company (Anonim Sirket in 

Turkish) can only be merged with a joint 

stock company. Therefore merger of a joint 

stock company with a limited liability 

company (Limited Sirket in Turkish) is not 

possible. 

Cumhuriyet Caddesi Gezi Apartmanı No: 9 Kat: 5 D: 9 – 10 Taksim 34437 Istanbul – Turkey 

Phone: (+90 212) 238 10 65 Fax: (+90 212) 238 08 10 E-Mail: info@yamaner.av.tr Web: www.yamaner.av.tr 

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Following completion of the merger 

procedures, merging companies terminate 

without liquidation. Assets of the merging 

companies constitute a part of the capital of 

the absorbing company in case of absorption 

or entire capital of the new established 

company in case of consolidation. 

After the merger, all rights, obligations and 

the credits of the acquired company would 

be automatically –ipso iure- transferred to 

the absorbing company or the new 

established company as a whole. The 

absorbing company or the new established 

company shall be deemed as successor of 

the acquired companies. 

The following steps have to be followed for 

merger of the companies: 

- Authorized bodies of each company 

must empower their representatives to 

draft and sign the merger agreement 

- Merging companies have to apply to 

the court for the determination that there 

exist no obstacle for the merger as well 

as the determination of the merging 

company’s value 

- Merger agreement must be drafted 

and signed before the Notary Public 

- Shareholders of the merging 

companies must approve the merger 

agreement. If the merger is made by way 

of absorption, the shareholders of the 

absorbing company have to approve the 

capital increase arising from the 

acquisition as well. 

- Merger agreement and the balance 

sheets of each company must be 

registered with the relevant Trade 

Registry and published in the Trade 

Registry Gazette. In addition, the 

acquired companies have to publish a 

declaration showing how they would pay 

their debts. 

- Creditors of each company have 

right to object the merger before the 

competent court within three months 

following the publication of the merger 

decision in the Trade Registry Gazette. 

If no objection is made, the merger 

becomes effective three months 

following the publication. 

II. Acquisitions 

Acquisitions are mostly realized by means 

of share transfer, business transfer or asset 

transfer. 

1. Share Transfer 

Acquiring shares of a company is subject to 

the provisions of Turkish Commercial Code. 

Method of share transfer varies depending 

upon the type of the company. To transfer 

shares of a Limited Liability Company, the 

transferor and the transferee have to sign a 

share transfer agreement before the Notary 

Public. The shareholders must then approve 

the share transfer and this resolution has to 

be registered with the Trade Register and be 

published in the Trade Registry Gazette. 

In joint stock companies, share transfer 

method differs whether the shares are bearer 

or registered. If the shares are bearer, 

delivery of the shares to the transferee is 

sufficient to affect the share transfer. 

Registered shares require endorsement and 

delivery by the transferor to transferee and 

share transfer has to be registered in the 

share ledger of the company. 

Provisions of the articles of association of 

the company have to be considered before 

affecting the share transfers, since it might 

contain some limitations or require 

fulfillment of some procedures (i.e. pre- 



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emptive rights of other shareholders, 

approval of Board of Directors). 

In addition to the above procedures as 

provided by the Turkish Commercial Code, 

it is also common to sign a Share Transfer 

Agreement, where the rights and obligations 

of the transferor and the transferee are 

defined in more detail and representations 

and warranties of the transferor regarding 

the shares and the company are stated 

clearly. Nevertheless, signature of the Share 

Transfer Agreement does not automatically 

transfer the shares and the related provisions 

of the Turkish Commercial Code as 

described above have to be followed to 

transfer of the ownership of the shares. 

2. Business transfer 

Whole or part of a business of a company 

can be transferred to a third party. In case 

the whole of the business is intended to 

transfer article 179 of the Turkish Code of 

Obligations is applicable. In this case, rights 

and obligations related to the business would 

be transferred automatically to the transferee 

whereby both the transferor and the 

transferee will continue to be jointly liable 

against the creditors for the obligations 

arising from the business for a period of two 

years. On the other hand, the transferor shall 

be liable from the obligations of the business 

as of the date when he/she informed the 

transfer of business to the creditors or 

announced the same in the newspapers. 

3. Asset transfer 

In order not to take over certain liabilities of 

the transferor, taking over some assets could 

be a solution under certain conditions. 

Depending on the type of the asset to be 

transferred, provisions of different laws are 

applicable. For example if there is an 

immovable within the assets to be 

transferred provisions of Turkish Civil Code 

has to be followed. According to this sales 

agreement has to be drafted by and 

concluded before the Land Registry. Or if a 

trademark would be transferred a separate 

trade mark transfer agreement has to be 

concluded and submitted to the Turkish 

Patent Institute. 

In practice a general asset transfer 

agreement is being drafted and on the 

closing day each asset is being transferred in 

accordance with the legal requirements for 

transferring the ownership of the respective 

asset. 

4. A thin line between asset transfer and the 

business transfer 

In some cases transfer of some assets of a 

company is considered as business transfer 

under certain laws. Especially in cases 

where main assets of the company including 

the personnel would be transferred to the 

transferor shall be considered as transfer of 

business despite for example the obligations 

of the transferee would not be transferred. 

The main criterion is whether the transferee 

could continue to its activities and pay its 

debts after the asset transfer. If following the 

asset transfer, there would not be sufficient 

assets or if there would be no business to 

perform, as a result of which the receivables 

of the creditors cannot be recovered, then it 

is considered that the business is transferred. 

The following laws consider the transferee 

as the legal successor of the transferor in the 

above cases and therefore the transferor 

might hold liable for the obligations of the 

transferee despite such obligations have not 

been transferred: 

- Labour law 

Turkish Labour Law considers above 

mentioned transfers as "transfer of working 

place" in which case the transferor would be 

considered as the "successor" of the 

transferee. Therefore the transferee will be 



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liable for any kind of duties of the transferor 

arising from the employment agreements 

and Turkish Labour Code for the period 

before the transfer including the severance 

payment obligations. 

- Turkish Bankruptcy and Execution Law 

If the debtors of the transferor are not 

informed of the transfer of the Business 

three months before the transfer, it would 

be deemed that the Purchaser knew that the 

Seller sold its assets against the interest of 

the creditors. If the debtors are not informed 

according to the procedure described in the 

law, asset transfer agreement shall be 

deemed null and void, in which case the 

debtors shall have the right to attach all 

transferred assets. The law provides the 

following alternatives to inform the debtors: 

a. Sending a letter 

b. Hanging a signboard at the 

company’s premises stating that 

the business would be transferred 

and announcing the transfer in 

the Trade Registry Gazette 

c. If the above is not possible, by 

means of any kind of vehicle (i.e. 

announcement in the 

newspapers) informing all 

debtors regarding the transfer of 

Business 

- Law for Collection of Public Debts 

Transferee shall be deemed as legal 

successor of the transferor and could be hold 

liable for the debts of the transferor to 

government bodies, such as tax office, social 

security institute. It is not possible to 

exclude this liability by means of informing 

the related government agency about the 

transfer or making announcements or 

signing an agreement. 

Authorizations 

I. Permission of the Turkish 

Competition Board 

According to Turkish Competition Act and 

its related Communiqué, in case 

- the combined aggregate turnover of 

the parties in exceeds TL 100 million 

and the aggregate Turkish turnover 

of each of at least two of the parties 

to the transaction exceeds TL 30 

million, or 

- or if the worldwide turnover of one 

of the parties exceeds TL 500 million 

and the Turkish turnover of at least 

one of the other parties exceeds TL 5 

million, the transaction must be 

subject to prior notification. 

The turnover thresholds are subject to 

revision by the Turkish Competition 

Authority every two years. 

The notification is not required if there is no 

affected market as a result of a transaction, 

nevertheless in case of a joint venture, even 

if the transactions exceed the turnover 

thresholds, 

For the purpose of calculating the thresholds 

any two or more transactions between the 

same persons or undertakings occurring 

within a two-year period shall be treated as a 

single concentration. 



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. 

II. Permission of Government 

Agencies 

Depending on the sector, in which the 

merger or acquisition would take place, 

prior permission of such authorities, i.e. 

Banking Regulatory and Supervisory 

Authority, Telecommunication Authority, 

Energy Market Regulatory Authority; has to 

be obtained before the closing of merger or 

acquisition transaction. Such authorities may 

also restrict provisions of the merger or 

acquisition agreement between the parties. 

III. Capital Market Board 

(CMB)’s Permission 

If one the parties to the merger or 

acquisition is a listed (publicly held) 

company, some requirements of the CMB 

has to be fulfilled. 

In case of a merger, before submitting the 

merger agreement to the approval of the 

General Assembly, prior permission of the 

CMB has to be obtained. Provisions of the 

Communiqués of the CMB has to be applied 

for the calculation method of the assets, 

determining the new share capital of the 

merging entities and post-merger 

notifications. 

If the acquisition would take place in the 

form of an allocated sale of shares, the sale 

has to be realized in the Istanbul Stock 

Exchange and its requirements must be 

fulfilled by the involved parties. 

In case of the an acquisition of 25% or more 

of the capital and voting rights or if 

management control would be acquired, 

through block sale or series of sales, an offer 

to the other shareholders has to be made to 

buy their shares (Mandatory Tender Offer). 

Furthermore, if a party or parties acting 

together owns between 25%-50% of the 

capital and voting rights of the company, 

and intends to increase such rates by 10% or 

more within a 12 months period, such party 

or parties must also make a Mandatory 

Tender Offer. In case of existence of certain 

conditions, the CMB may grant exemption 

from the Mandatory Tender Offer 

obligation. 

Major changes in the assets and share 

structure of the company, that may affect 

investor’s decisions, market value of the 

shares and all material issues regarding the 

company, its operations, subsidiaries and 

manager, have to be disclosed to the CMB 

and ISE. The ISE, then announce such 

changes in the daily bulletin to the investors. 

A list of the major changes has been 

announced by the CMB’s Communiqués. 

For further information on Mergers & 

Acquisitions in Turkey please contact Ms. 

Handan Oktay Weldishofer at: 

howeldishofer@yamaner.av.tr 



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110404-MERGERS AND ACQUISITIONS-Yamaner - AllIURIS

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