Competition Board Clearance In Mergers And Acquisitions

1. Introduction

In mergers and acquisitions (“M&A“) transactions, obtaining clearance from the relevant sectoral regulatory authority may be required depending on the nature of the target company’s operations. In particular, where the target company holds a mining licence, obtaining clearance from the Mining and Petroleum Affairs General Directorate (“MAPEG“), which operates under the auspices of the Ministry of Energy and Natural Resources (the “Ministry“), constitutes a mandatory condition precedent in addition to the clearance required from the Competition Board.

Law No. 3213 on Mining (the “Law“) and the Mining Regulation (the “Regulation“) subject changes in the shareholding structures of legal entities holding mining licences to a regulatory oversight mechanism. This oversight serves the purposes of ensuring that mineral resources are exploited in accordance with the national interest, maintaining the adequacy and competence of licence holders, and safeguarding the uninterrupted continuation of mining operations.

This newsletter examines the legal framework governing the requirement to obtain MAPEG clearance in M&A transactions where the target company holds a mining licence, the applicable approval procedures, the sanctions that may arise in the event of non-compliance, and the manner in which this clearance requirement should be addressed in the share purchase agreement (“SPA“).

2. Legal Framework Governing Mining Legislation

1. Primary Legislation

The regulatory basis for share transfer transactions involving companies holding mining licences is established by the Law and the Regulation. Article 5 of the Law sets out the fundamental principles governing the transfer of mining licences, whilst Article 79 of the Regulation prescribes in detail the procedures and requirements applicable to both licence transfers and share transfers. MAPEG, operating within the Ministry, is the competent authority responsible for the implementation and enforcement of this legislative framework.

2. The Principle of Indivisibility of Mining Licences

Article 5 of the Law expressly provides that none of the rights established over minerals—including the right of first application, exploration licence, discovery right, proven reserve development right and operating licence—may be divided into shares, and that each such right shall be treated as an indivisible whole. Accordingly, whilst mining licences, proven reserve development rights and discovery rights are transferable, any such transfer may only be effected as an indivisible whole, subject to the approval of the Ministry, and is completed upon registration with the mining registry.

3. Mandatory Ministerial Clearance for Share Transfers

From an M&A perspective, the clearance requirement is set out in Article 79/11 of the Regulation. Pursuant to this provision, share transfers exceeding 10% that would result in a change in the shareholding structure of the target company holding a mining licence are subject to the approval of the Ministry.

This provision establishes a critical distinction between a direct licence transfer (asset deal) and an acquisition effected by way of a share transfer (share deal). Whilst a direct licence transfer is subject to clearance in all circumstances, a share transfer will only require clearance where the shares being transferred represent 10% or more of the target’s issued share capital. In the context of an M&A transaction involving the acquisition of the entirety or a controlling majority of the target company, the 10% threshold will inevitably be exceeded, and accordingly, such transactions will invariably require Ministerial clearance.

It should be underscored that the share transfer clearance requirement applies solely to changes in the shareholding structure at the level of the legal entity directly holding the mining licence. Whether indirect changes of control—such as share transfers at the level of the licence holder’s parent company—fall within the scope of MAPEG’s clearance requirement is not expressly addressed in the legislation, giving rise to uncertainty in practice. Accordingly, particularly in the context of multi-layered holding structures, we recommend adopting a cautious approach and engaging in preliminary consultations with MAPEG.

4. Mandatory Ministerial Clearance for Mergers

Where an M&A transaction takes the form of a merger, pursuant to Article 79/7-a of the Regulation, it shall be deemed a transfer and will accordingly be subject to the transfer provisions, thereby requiring Ministerial clearance.

3. MAPEG Clearance Procedure and Required Documentation

1. Filing Procedure

Pursuant to Article 79/11 of the Regulation, the parties to the share transfer are required to file a simultaneous application with MAPEG, setting out the grounds for the proposed transaction. Applications are submitted through the e-Maden system, which is accessible via the e-Government (e-Devlet) portal.

2. Required Documentation

The documentation to be submitted in connection with a share transfer clearance application is not expressly specified in the legislation. Nevertheless, it would be prudent to submit the documents listed below, which are required in the context of a licence transfer application, mutatis mutandis in a share transfer filing. We further note that MAPEG may request additional information and documentation during the course of the application process. Accordingly, MAPEG may require the following information and documentation:

• Current extract from the Turkish Trade Registry Gazette evidencing the legal entity’s existing shareholding structure;
• Information and documentation pertaining to the post-transfer shareholding structure;
• Financial adequacy documentation of the transferee (bank reference letters, certified Trade Registry Gazette evidencing the company’s paid-up share capital);
• Notarised copy of the share transfer agreement;
• Certificate confirming that the parties have no overdue liabilities under Article 22/A of Law No. 6183 on the Procedure for the Collection of Public Receivables;
• Trade Registry Gazette evidencing the board members of the transferee;
• Notarised signature circulars of the parties;
• Activated registered electronic mail (KEP) or UETS address details;
• Where the M&A transaction constitutes a merger rather than a share transfer, payment of the operating licence base fee (TRY 180,461 for 2026) and the licence transfer fee, which is equal to twice the operating licence base fee.

3. Review Process

The application is reviewed by MAPEG, and where the Ministry deems the application to be appropriate, the relevant legal entity is duly notified. Pursuant to Article 79/12 of the Regulation, any deficiencies identified in the application are notified to the applicant, and where such deficiencies are not remedied within 3 months, the application shall be refused.

In addition to the information and documentation to be submitted with the application, MAPEG further examines during the review process whether the transferee satisfies the eligibility requirements for exercising mining rights under Article 6 of the Law, whether the financial adequacy requirements are met, whether all accrued State royalties have been paid, whether all outstanding financial obligations have been discharged, and whether mining operations at the licence area have been conducted in compliance with the applicable legislation.

4. Sanctions for Non-Compliance

Where the requisite clearance is not obtained in respect of the target company’s mining licence in an M&A transaction, the following sanctions may be imposed under the Law and the Regulation:

• production and operations at the mining licence area shall be suspended;
• as the transaction effected without clearance is deemed invalid, the records at the Ministry regarding the new shareholding structure shall not be updated;
• administrative monetary fines shall be imposed for the transaction carried out in contravention of the Law;
• where the violations are not remedied and the requisite clearances are not obtained, the mining licence shall be revoked;
• where the deficiencies remain unresolved, performance bonds may be forfeited in addition to the revocation of the licence.

5. Addressing MAPEG Clearance in M&A Transactions

1. Significance in the Due Diligence Process

In transactions where the target company holds a mining licence, the following matters should be examined during the due diligence process:

• the validity, duration and renewability of the mining licence;
• the existence and scope of the operating permit;
• whether all financial obligations, including State royalties, licence fees and administrative monetary fines, have been duly discharged;
• any liens, pledges, mortgages or injunctive orders registered against the licence;
• the status of environmental obligations (environmental impact assessment, environmental compliance plan);
• the existence and terms of any royalty (rödovans) agreements;
• whether a permanent supervisor has been appointed and whether an authorised technical entity agreement is in place.

2. MAPEG Clearance as a Condition Precedent in Share Purchase Agreements

In M&A transactions where the target company holds a mining licence, the obtaining of MAPEG clearance should be structured as a condition precedent within the SPA, and closing should not be effected unless and until such clearance has been obtained. In transactions where other regulatory approvals—such as Competition Board clearance—are also designated as conditions precedent, the obtaining of all required clearances should be collectively stipulated as conditions to closing.

1. The Interim Period Between Signing and Closing

The SPA should expressly set out the seller’s obligation to manage the target company and the mining licence in the ordinary course of business during the interim period between signing and closing. In this regard, the seller should undertake, without the prior written consent of the buyer, not to alter the licence area, not to transfer or create any encumbrance over the licence, not to enter into any royalty agreements, to continue mining operations in accordance with the approved project, and to discharge all financial obligations (State royalties, licence fees, levies) in a timely manner.

2. Efforts Clauses and Risk Allocation

The obligations to be assumed by the parties in connection with obtaining MAPEG clearance are defined through the efforts clauses contained in the SPA. Unlike Competition Board clearance, MAPEG clearance is generally predicated upon administrative and technical adequacy criteria rather than competitive assessments. Accordingly, the prospects of obtaining MAPEG clearance are largely contingent upon the financial adequacy of the transferee and its compliance with mining legislation.

In practice, the buyer typically undertakes to submit a timely and complete application for MAPEG clearance, to respond to MAPEG’s requests for additional information and documentation within the prescribed time limits, and to conduct the process in good faith. The seller, for its part, typically represents and warrants that all outstanding financial obligations (State royalties, licence fees, administrative monetary fines) have been fully discharged prior to closing, and that there are no pending administrative investigations or sanction proceedings in respect of the licence.

3. Seller’s Representations and Warranties

In transactions where the target company holds a mining licence, the seller’s representations and warranties in the SPA should, in particular, address the following matters:

• that the mining licence is valid and subsisting;
• that the operating permit has been obtained and is currently active;
• that all financial obligations pertaining to the licence (State royalties, licence fees, levies, environmental compliance bonds, administrative monetary fines) have been fully discharged;
• that mining operations have been conducted in compliance with the applicable legislation;
• that no third-party rights (liens, pledges, mortgages) subsist over the licence;
• that there are no pending or threatened investigations or sanction proceedings under the mining legislation.

4. Long-Stop Date and Termination Rights

The SPA should prescribe a reasonable long-stop date for the obtaining of MAPEG clearance, and should confer upon either party the right to terminate the agreement in the event that clearance has not been obtained by such date. Whilst the MAPEG clearance process is generally observed to be of shorter duration than the Competition Board review, unforeseen delays may arise, including the period allowed for the remediation of deficient documentation. Accordingly, when determining the long-stop date, it may be provided in the SPA that the MAPEG clearance process may be conducted in parallel with the Competition Board approval process.

In addition, Material Adverse Change (“MAC“) clauses should be incorporated into the transaction documents in order to address the possibility of a collapse in macroeconomic conditions, a loss of the target company’s market position, or the occurrence of an unforeseen crisis during the review period. MAC clauses are designed to afford the buyer the flexibility to renegotiate the terms of the transaction or to withdraw from the transaction altogether in the event that the commercial value of the target company suffers an unforeseeable and material deterioration whilst MAPEG clearance remains pending.

6. Summary

In M&A transactions where the target company holds a mining licence, share transfers exceeding 10% that would result in a change in the shareholding structure of the licence-holding entity are subject to the approval of the Ministry pursuant to Article 79/11 of the Regulation. This clearance is administered through MAPEG, and the principal assessment criteria include the financial adequacy of the transferee, its eligibility to exercise mining rights, and the full discharge of all financial obligations pertaining to the licence.

Share transfers effected without the requisite clearance may attract severe sanctions, including administrative monetary fines, the suspension of mining operations, and ultimately the revocation of the mining licence and forfeiture of performance bonds.

In M&A practice, MAPEG clearance constitutes one of the fundamental regulatory conditions precedent that must be addressed in the SPA alongside Competition Board clearance. The clear and comprehensive treatment of this clearance requirement within the SPA’s risk allocation mechanisms—including efforts clauses, representations and warranties, and long-stop date provisions—is of critical importance for the legal certainty and commercial success of the transaction.