Turkey: Ten Essential Developments Under the New Communiqué on Mergers and Acquisitions Subject to the Approval of the Turkish Competition Board

The New Communiqué No. 2010/4 on Mergers and Acquisitions Subject to the Approval of the Turkish Competition Board is published on October 7th, 2010, and it brings a new Turkish merger control regime into the Turkish competition law system. Set forth below is a list of the 10 fundamental changes brought with the new merger control regime, which will be in effect as of the 1st of January 2011. The list below does not contain an exhaustive counting of all revisions made with the new legislation, and it contains only a brief introductory discussion on selected ten issues of high interest.

1. Article 5 regulates that conditional transactions and closely-related transactions realized over a short period of time by way of expedited exchange of securities are treated as a single transaction. In this respect Article 8 brings about a new regime for calculating turnover for successive transactions, according to which multiple transactions between the same undertakings realized over a period of two years are deemed as a single transaction in terms of turnover calculation.

2. As per Article 13, cooperative joint ventures will also be subject to a merger control notification and analysis on top of an individual exemption analysis, if warranted.

3. New and only turnover-based thresholds are brought in Article 7. Most importantly, except for joint ventures, if it does not lead to an affected market in Turkey, a transaction will not be notifiable to the Turkish Competition Authority. Affected markets are found when there are markets "with a possibility to be impacted by" the transaction, and (1) where two or more of the parties have commercial activities in the same product market (horizontal relationship), or (2) where at least one of the parties is engaged in commercial activities in markets which are upstream or downstream from the product market of the other party (vertical relationship). If there is an "affected market", the transaction will be reviewed for notifiability under the thresholds: In that case, if the total turnover of the parties to a concentration in Turkey exceeds TL 100 million1 and the respective turnovers of at least two of the parties individually exceed TL 30 million,2 OR the worldwide turnover of one of the parties exceeds TL 500 million3 and the Turkish turnover of at least one of the other parties to the concentration exceeds TL 5 million,4 then the transaction will be subject to the Board's permission.

To that end, the era of notifying transactions with no horizontal overlap and no vertical integration potential is coming to an end as of the end of year 2010. Furthermore, it will no longer be necessary to define the relevant product market properly in order to engage in a notifiability analysis in Turkey, as the market share threshold will be abolished by year end, and the alternative turnover threshold will not be sought in the relevant product market (i.e. total Turkish turnovers and total worldwide turnovers will be the determining factor, as explained above).

4. Under Article 10, a transaction is deemed to be "realized (i.e. closed) on the date when the change in control occurs. It remains to be seen if this provision will be interpreted by the Competition Authority in a way that provides the parties to a notification to carve out the Turkish jurisdiction with a hold separate agreement. This has consistently been rejected by the Turkish Competition Board so far, arguing that a closing is sufficient for the suspension violation fine to be imposed, and that a further analysis of whether change in control actually took effect in Turkey is unwarranted.

5. The Competition Authority will publish the notified transactions on its official website with only the names of the parties, and their areas of commercial activity. To that end, once notified to the Turkish Competition Authority, the "existence" of a transaction will no longer be a confidential matter.

6. Another important change in the Turkish merger control regime is brought about with Article 13. The Board's approval decision will be deemed to also cover only the directly related and necessary extent of restraints in competition brought by the concentration (e.g. non-compete, non-solicitation, confidentiality, etc.) This will allow the parties to engage in self-assessment, and the Board will not have to devote a separate part of its decision to the ancillary status of all restraints brought with the transaction anymore.

7. Article 13 is significant in the sense that efficiencies are openly recognized and discussed. The wording of the provision allows us to infer that efficiencies will be taken into consideration in favor of approving the transaction only to the extent they demonstrably serve consumer welfare maximization objectives, and that the total welfare maximization benefits will not lead to a dramatic impact unless it trickles down specifically to consumers.

8. Article 14 regulates the possibility that the parties might provide commitments to remedy substantive competition law issues of a concentration under Article 7 of the Law on Protection of Competition (Law No. 4054). Strategic thinking at the time of filing is somewhat discouraged through an explicit language confirming that the review periods would start only after the filing is made. This is already the current situation in practice, but now it is explicitly stated. The Board is now explicitly given the right to secure certain conditions and obligations to ensure the proper performance of commitments.

9. The notification form itself is also revised. In parallel with the new notion that only transactions with a relevant nexus to the Turkish jurisdiction will be notified anyway, there is an increase in information requested, including data with respect to supply and demand structure, imports, potential competition, expected efficiencies, etc.

There is now a short-form notification (without a fast-track procedure) if: (i) a transition from joint control to full control is at stake; and (iii) the total of the parties' respective market shares is less than 20% in horizontally affected markets and one party's market share is less than 25% in vertically affected markets.

10. The new notification form no longer insists on "signed copies of the agreement leading to the notified concentration". This is a much welcome change allowing the parties to file before the transaction document is signed. While this will save very valuable time, and certainly consists an improvement over the currently applicable regime, there remains a risk that the Board might still refuse to act on memoranda of undertaking or letters of intent, since the new provision refers to the "current version of the agreement".

Footnotes

1. Approximately EUR 50.838 million according to the free market exchange rates of October 2010

2. Approximately EUR 15.251 million according to the free market exchange rates of October 2010

3. Approximately EUR 254.194 million according to the free market exchange rates of October 2010

4. Approximately EUR 2.541 million according to the free market exchange rates of October 2010

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions