Authority / Source
Mandatory / Voluntary
Mandatory if the notification criteria are met (i.e. change of control and turnover thresholds).
When to notify?
The approval has to be obtained before the transaction is closed. The Competition Board reviews a proposed transaction that does not raise any substantive question, in four to six weeks, on average. Hence, it is advisable to make the notification at least four to six weeks prior to the intended closing date.
Notification is mandatory if:
- aggregated turnover of the transaction parties in Turkey exceeds TRY 100 m (approx. EUR 45 m), and turnovers of at least two of the transaction parties in Turkey each exceed TRY 30 m (approx. EUR fourteen million), or
- In acquisition transactions the asset or the activity that is subject to the acquisition, in merger transactions at least one of the transaction parties has a turnover in Turkey exceeding TRY 30 m (approx. EUR 14 m) and the global turnover of at least one of the remaining transaction parties exceeds TRY 500 m (approx. EUR 225 m)
Obligation on whom
In case of an acquisition, the responsibility to notify lies with the acquirer. Otherwise, (in cases of mergers and joint ventures) either party is responsible for notifying. A notification done by either party relieves the other one from its notification duty. The notifying party is required to inform its counterparty regarding the submission.
Consequences of failure to notify
- Closing a transaction that is subject to the approval of the Turkish Competition Board prematurely will incur an administrative fine of 0.1% of the turnover generated in the financial year preceding the decision to impose such fine.
The Competition Board will review the transaction (ex officio or upon request of the parties) after becoming aware of the transaction. If the Board finds that a transaction which had been closed instead of being suspended until the clearance decision qualifies as an illegal and prohibited transaction under the Competition Law, the Board may:
- impose an administrative fine on each party (for an acquisition transaction on the acquirer only) of up to 10% of the turnover of the corresponding party that was generated in the financial year preceding the decision to impose such fine;
- fine the managers or employees who are determined to have played an instrumental role in the competition law infringement with an administrative fine of up to 5% of the penalty that is imposed on the undertaking due to the same infringement;
- impose an administrative fine on each party (for an acquisition transaction on acquirer only) of 0.1% of the turnover of the corresponding party that was generated in the financial year preceding the decision to impose such fine;
- decide to terminate the merger or acquisition;
- decide for the abolition of all factual states created by the realisation of the unapproved transaction;
- decide the shares and properties to be returned to their previous owners, or if this is not possible, to transfer these assets to third parties.
- Order other measures which the Competition Board may deem appropriate.
Furthermore, the transaction will be void.
Consequences of implementing a transaction despite obligation to suspend until clearance
All notifiable transactions are suspended until the approval decision of the Turkish Competition Board. Accordingly, Turkish Competition Law does not have separate rules for failure to notify and consummating the transaction without required approval. For details of the consequences of either demeanor, please refer to the section on the consequences of failure to notify, above.
Consequences of implementing transaction despite prohibition decision
If the Board discovers that the parties have consummated a transaction which the Competition Board had previously found to be an illegal and prohibited transaction under the Competition Law, the Board may impose a daily administrative fine on each party in addition to the above listed measures to be imposed upon failure to notify (for an acquisition transaction on the acquirer only) of 0.05% of the turnover of the corresponding party that was generated in the financial year preceding the decision to impose such fine.
First Stage - 30 calendar days
If the Board does not respond to or take any action regarding a notification within 30 days of the date of the filing, the transaction will be deemed to have been approved and becomes legally valid.
In practice, the thirty day period of suspension may be prolonged due to official correspondence.
Second Stage - six to 12 months
If the Board decides to conduct a final examination, the transaction will be suspended until the ultimate decision of the Board.
Foreign-to-foreign mergers caught?
Subject to notification if the thresholds are met.
Treatment of JVs
Joint ventures are subject to notification provided that there is change of control and the turnover thresholds are met. A full-function joint venture that is being established outside of Turkey whose parents have a combined Turkish turnover of more than TL 100 m and at least two of whose parents have Turkish turnover in excess of TL 30 m is required to be notified in Turkey. This applies even if the relevant joit venture is not expected to have any commercial activity in Turkey.
Up to date as of 1 September 2014