Brief on the Merger Control Regime in Turkey

Through the Ankara Agreement, the Republic of Turkey undertook to align several folds of its legislation with the EU and competition law is one of them. For this reason, Turkish merger control regime is very similar to the EU regime.

Mergers and acquisition transactions meeting the criteria set forth under the relevant legislation are subject to mandatory notification before the Turkish Competition Authority (TCA) prior to closing.

The core provision in Turkish legislation on merger control is Article 7 of the Law on Protection of Competition No. 4054 (Law No. 4054)[1] which prohibits mergers or acquisitions that would result in a significant lessening of effective competition within a market for goods or services in the entirety or a portion of Turkey, particularly in the form of creating or strengthening a dominant position.

The wording of Article 7 should not mislead transaction parties, it sets out the ground rule for the competitive assessment; it does not stipulate which transactions are notifiable. Many foreign-to-foreign transactions which have no direct effect to Turkish markets are subject to mandatory notification in Turkey, as they fulfil the notifiability conditions.

Indeed, notifiability of a transaction should be examined as per the TCA’s Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board (the “Communiqué”), the main legislation of Turkish merger control regime.

According to the Communiqué, mergers and acquisitions:

  1. resulting in change of control on a lasting basis, and
  2. triggering the turnover thresholds,

are subject to mandatory notification before the TCA.

As regards the first condition, Article 5 of the Communiqué stipulates that the change of control on a lasting basis can arise from (a) the merger of two or more 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. Establishment of full function joint ventures are deemed as acquisitions within the scope of the Communiqué, and thus, should their creation trigger the turnover thresholds, they will be subject to mandatory notification.

The second condition, turnover thresholds, are regulated under Article 7 of Communiqué, which sets forth that a transaction is notifiable if either of (a) or (b) is triggered;

  • the Turkish turnover of at least two of the transaction parties each exceeds TRY 30 million (c. EUR 3.7 million, c. USD 4.3 million) and the aggregate Turkish turnover of the parties exceeds TRY 100 million (c. EUR 12.5 million c. USD 14.3 million), or
  • the Turkish turnover of the asset or activity subject to acquisition (target) in acquisitions or at least one of the transaction parties in mergers exceeds TRY 30 million (c. EUR 3.7 million, c. USD 4.3 million) and worldwide turnover of one of the other transaction parties exceeds TRY 500 million (c. EUR 62.3 million, c. USD 71.3 million)[2].

All in all, provided that (i) the transaction leads to a lasting change of control as per Article 5 and (ii) either of the turnover thresholds stipulated under folds (a) or (b) of Article 7 are triggered, the transaction will be subject to the mandatory notification in Turkey.

The TCB has been consistently applying the change of control and turnover thresholds criteria set forth under the Communiqué for years and there are numerous TCB decisions where the TCB ruled that the transaction is subject to mandatory notification in Turkey, although it has no direct relevance or impact in Turkey[3]. It is for sure that a transaction with no effect in Turkey will be subject to a relatively comfortable competitive assessment, but that does not lift the burden on the parties to apply to the TCA for an approval.

Notifiable transactions must not be closed (stand-still obligation) before the approval decision of the Turkish Competition Board, (the TCB, the decisive body of the TCA).

The TCB’s approval decision is a prerequisite for the validity and enforceability of transactions subject to mandatory notification. A notifiable transaction which is closed before the approval of the TCB would be deemed null and void under Turkish law.

Failure to notify a transaction subject to mandatory merger control filing before the closing or not notifying it at all may lead to administrative monetary fines and/or structural sanctions. The act of failure to notify itself is subject to an administrative monetary fine amounting to one in thousand of the relevant undertakings’ turnovers in the year preceding the TCB’s decision.

After becoming aware of the transaction which should have been notified, the TCB will conduct a competitive assessment and decide whether an approval can be granted or not. If, at the end of such assessment, the TCB considers that the relevant transaction is a transaction infringing Article 7 of the Law No. 4054 (i.e. it leads to significant impediment of effective competition), the TCB can impose an administrative monetary fine up to ten percent of the relevant undertakings’ turnovers in the year preceding the TCB’s decision. In addition, it may decide for sanctions such as the termination of the transaction, elimination of all de facto results of the transaction committed contrary to the law such as returning of shares and assets etc.

This note is intended for general information purposes only and should not be relied upon as a source of legal advice. Independent legal advice should be sought before taking any action based on information contained within this note for each particular case.

[1] The TCA includes English translations of the Law No. 4054 and relevant regulations, communiqués and guidelines on its official website. English translation of the Law No. 4054 can be accessed on the following link:

[2] The currencies are calculated based on the average buying exchange rates of the Central Bank of the Republic of Turkey in 2020: EUR 1 = TRY 8.03 and USD 1 = TRY 7.01.

[3] The following are TCB’s most recent decisions where the TCB ruled that transactions with no direct effect in Turkey are notifiable: the TCB’s decision dated 14.05.2020 with no. 20-24/309-149; the TCB’s decision dated 21.05.2020 with no. 20-25/324-152; the TCB’s decision dated 25.06.2020 with no. 20-31/386-172; the TCB’s decision dated 09.07.2020 with no. 20-33/414-190; the TCB’s decision dated 24.07.2020 with no. 20-35/465-205.


By |2021-06-26T23:57:11+03:0026 June 2021|Uncategorized|0 Comments

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