Article 5(2) of Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Board (“Communiqué No. 2010/4”) and the Guidelines on Cases Considered as a Merger or an Acquisition and the Concept of Control (“Guidelines”) analyze the concept of control.
Communiqué No. 2010/4 sets out the means through which control can be acquired, as well as the entities who can acquire control:
(i) Control can be acquired by means of rights, contracts or other instruments which, separately or jointly, allow de jure or de facto exercise of decisive influence over a company’s structure or decisions. This refers to, in particular, those instruments that provide a right of ownership or right of use, which can be exercised over all or part of the assets of a company.
(ii) Control can be acquired by right holders or by persons/companies who have been empowered by a contract to exercise such rights or who have de facto power to exercise such rights, even though they do not legally hold them.
The Guidelines set out several types of control, namely (i) full or partial control, (ii) control on a lasting basis, (iii) sole or joint control and de jure or de facto control. These terms are shortly presented below because more detailed information on the following issues is provided under sections “Change of Control on a Lasting Basis”, “Sole Control” and “Joint Control”.
(1) Acquisition of full control of a company concerns the whole company, including all of its tangible and intangible assets. Partial control, on the other hand, concerns a certain part of the company’s tangible and/or intangible assets. Both full and partial control can refer to assets, premises, employees, client base, intellectual property rights (such as brands, patents, designs or copyrights), licenses related to intellectual property rights, etc.
(2) Control on a lasting basis is the only type of control that can amount to a concentration within the meaning of merger control rules. Any transaction resulting in a temporary change of control which, consequently, would not bring about a lasting change in the control structure of the target, would not be caught under the Law No. 4054 on the Protection of Competition (“Competition Law”) and Communiqué No. 2010/4.
(3) Sole control occurs when one company alone has decisive influence on another company, by determining the latter’s strategic commercial decisions and/or by having the right to veto these decisions. It is further sub-divided into de jure and de facto control. De jure sole control usually occurs through the acquisition of the majority of the voting rights of a company. De facto sole control occurs where the minority shareholder is highly likely to achieve a majority at the shareholders' meetings, given the amount of shares owned and the participation levels of shareholders in the shareholders' meetings in previous years.
Joint control occurs when two or more companies or individuals have the power to exercise decisive influence over a third company.