Significant amendments were introduced to the Communiqué of the Competition Authority on Mergers and Acquisitions Requiring Authorization of the Turkish Competition Board, numbered 2010/4, with the Communiqué published in the Official Gazette on March 4, 2022. In this respect, while the turnover thresholds taken into account in mergers and acquisitions to determine whether Competition Board’s approval is necessary are increased, exceptional rules are adopted in relation to transactions involving technology companies. These amendments will become effective two months after their publication, i.e., as of May 4, 2022.
Increase of Turnover Thresholds
Pursuant to the new provision, in cases where:
- Total turnovers of the transaction parties in Turkey exceed 750 million TL, and turnovers of at least two of the transaction parties in Turkey each exceeds 250 million TL, or
- The asset or activity subject to acquisition in acquisition transactions and at least one of the parties of the transaction in merger transactions have a turnover in Turkey exceeding 250 million TL and the other party of the transactions has a global turnover exceeding 3 billion TL
the Board’s authorization will need to be obtained for the validity of the underlying transaction. If these turnover thresholds are not exceeded, competition clearance will not be required.
Before the amendment, the 250 million TL threshold was 30 million TL, the 750 million threshold was 100 million TL, and the 3 billion TL threshold was 500 million TL. In this regard, the amendment introduces a significant increase in turnover thresholds.
Exceptional Threshold Rules in Tech M&As
For mergers and acquisitions involving technology undertakings providing services to users in Turkey, the aforementioned 250 million TL turnover thresholds will not be sought. That means, if the total turnover of the transaction parties in Turkey exceeds 750 million TL or the global turnover of at least one of the transaction parties exceeds 3 billion TL, the Competition Board must be notified before taking over a technological company. The term “technology undertakings” is defined for the first time and includes gaming, software, online television, financial technology, biotechnology, health technology, e-commerce, cryptocurrency, artificial intelligence, and all other technology companies. Accordingly, most tech M&A deals would be subject to the inspection of the Competition Authority.
Other Amendments
In addition, the Notification Form on Mergers and Acquisitions attached to the relevant Communiqué has been updated. From now on, the Board must be notified with the updated form for transactions subject to authorization. Finally, whereas the respective transaction could previously be notified by hand or by mail, it will soon be possible to do so via e-Government system.
By Zahide Altunbas Sancak, Partner, Guleryuz & Partners
