Answer ... The relevant legislation on merger control is the Law on Protection of Competition 4054 dated 13 December 1994 and the communiqués published by the Turkish Competition Authority. In particular, Article 7 of Law 4054 governs mergers and acquisitions.
Article 7 of Law 4054 authorises the Competition Board to regulate, through communiqués, which mergers and acquisitions should be notified in order to be valid. Further to this provision, as of 1 January 2011, Communiqué 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board replaced Communiqué 1997/1 on Mergers and Acquisitions Requiring the Approval of the Competition Board as the primary instrument for assessing merger cases in Turkey. Communiqué 2010/4 sets forth the types of mergers and acquisitions that are subject to the Competition Board’s review and approval, introducing some significant changes to the Turkish merger control regime.
Answer ... Along with the general items to be taken into account in calculating the total turnover of the parties to the transaction, Article 9 of Communiqué 2010/4 sets forth specific methods of turnover calculation for financial institutions. Such special methods of calculation apply to banks, financial leasing companies, factoring companies, insurance companies and similar.
The Banking Law 5411 provides that Articles 7, 10 and 11 of Law 4054 shall not apply if the sectoral share of the total assets of the banks involved in the merger or acquisition does not exceed 20%.
The notification process differs for privatisation tenders. With regard to privatisation tenders, Communiqué 1998/4 of the Competition Board was replaced with a new Communiqué on the Procedures and Principles to be Pursued in Pre-notifications and Authorisation Applications to be filed with the Turkish Competition Authority in order for Acquisitions via Privatisation to Become Legally Valid. According to Communiqué 2013/2, it is mandatory to file a pre-notification before the public announcement of tender and seek the opinion of the Competition Board if the turnover of the undertaking or the value of the asset or service production unit to be privatised exceeds TL 30 million. The communiqué states that in order for acquisitions to become legally valid through privatisation, which requires pre-notification of the Turkish Competition Authority, the approval of the Competition Board is also mandatory. The application should be filed by all winning bidders after the tender, but before the Privatisation Administration’s decision on the final acquisition.
Answer ... The national body responsible for enforcing Law 4054 in Turkey is the Turkish Competition Authority, a legal entity with administrative and financial autonomy. The Competition Authority consists of the Competition Board, the presidency and main service units. As the competent body of the Competition Authority, the Competition Board is responsible for, among other things, reviewing and resolving on M&A notifications. The Competition Board consists of seven members and is seated in Ankara.
The main service units consist of:
five supervision and enforcement departments:
- a decisions department;
- an economic analyses and research department;
- an information management department;
- an external relations, training and competition advocacy department; and
- a strategy development, regulation and budget department; and
- an on-the-spot inspection support division.
Each supervision and enforcement department has its own ‘sectoral’ job description.
The Competition Authority can send written information requests to the parties involved in the merger or acquisition, any other party relating to the transaction and third parties such as competitors, customers and suppliers, and can thus conduct an extensive market investigation within the specified legal timeframe (with possible extensions). Article 15 of Law 4054 authorises the Competition Board to conduct on-site investigations in order to carry out the duties assigned to it by Law 4054.