Turkey: The Turkish Competition Authority Released M&A Overview Report For 2017

Mergers and Acquisitions ("M&A") Overview Report 2017 (the "Report"), available at the website of the Turkish Competition Authority (the "TCA") as of January 8, 2018, provides brief information on the Turkish merger control system and makes comparison between 2016 and 2017, as well as Turkish and foreign investments. The aim of the Report is to provide an overview of the merger control regime in Turkey and determining the position of Turkish companies within the market. Foreign investors continue to be interested in the Turkish market, considering the value of Turkish-to-foreign transactions, and foreign investments in Turkish companies in 2017.

Some M&A Statistics Provided by the Report

Numbers of M&A

The number of the M&A transactions notified to the TCA in 2017 decreased when compared with 2016. In 2017, a total of 184 M&A transactions were notified to the TCA, while in 2016 this number was 209. Four of the notified transactions were taken into the second phase by the TCA in 2017. One of these transactions was not approved by the TCA and the review processes for other three has not been concluded yet. During the year 2017, two transactions¹ were approved within the scope of the remedies given by the parties.

Origins of M&A parties

According to the categorization in terms of the origin of the transaction parties, 31 transactions were realized solely between the Turkish companies in 2017, while in 2016 this number was 34. Furthermore, 83 out of 184 transactions were foreign-to-foreign transactions in 2017, which is 24 less compared to 2016 where foreign-to-foreign transactions amounted to 107. Finally, 54 transactions were between Turkish and foreign companies in 2017 (with 50 respective transactions in 2016). It is worth emphasizing that the value of Turkish-to-foreign transactions increased from TRY 10 billion (approx. €2.2 billion) in 2016 to TRY 11 billion (approx. €2.4 billion) in 2017. The value of solely between the Turkish companies' transactions decreased from TRY 7.3 billion (approx. €1.6 billion) in 2016 to TRY 5.2 billion (approx. €1.1 billion) in 2017. Lastly, the value of foreign-to-foreign transactions decreased from TRY 1.5 trillion (approx. €333 billion) in 2016 to TRY 1 trillion (approx. €222 billion) in 2017.

Foreign Investments

In 2017, foreign investors invested in Turkish companies with 47 different transactions (same as 2016). According to the ranking of foreign investors in terms of transactions, The Netherlands and Japan were leading (with 6 transactions), followed by France (4), Luxemburg (4), United Kingdom (3) and Austria (3). The number of transactions with the involvement of Japan, France, Luxemburg, and Kuwait increased in 2017 as compared with 2016. In acquisition transactions where Turkish companies were acquired, foreign investment constituted approximately TRY 15 billion 100 million (approx. €3.355 billion) in 2017, while in 2016 this figure amounted to TRY 18 billion 891 million (approx. €4.198 billion).

Market Breakdown of Transactions

In 2017, most of the M&A transactions were realized in the production, transmission and distribution of electricity markets as it also were in 2016. The highest transaction value in Turkey in 2017 was realized in the field of other wholesale trade in specialized stores. The transaction value in this area constituted 24.5% of the total value of all transactions in 2017 (excluding privatizations).

Markets Affected

As part of 70 out of 184 transactions notified to the attention of the TCA in 2017, no markets were affected in terms of activities in Turkey. The number of affected markets exceeding 40% market share threshold was eight and the number of affected markets below this market share threshold was 132.

Conclusion

In the Report, the TCA also indicates that M&A transactions notified to the TCA in 2017 were concluded within an average of 15 days following the date of final notification. The Report provides a clear picture of merger control regime in Turkey and determines the place of Turkish companies in the market. Foreign investors continue to be interested in the Turkish market, considering the increased value (as well as number) of Turkish-to-foreign transactions in 2017.

Footnote

1. Those transactions were submitted to the attention of the TCA in 2016.

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