Competition Board Clearance In Mergers And Acquisitions

1. Introduction

Mergers and acquisitions (“M&A”) transactions constitute one of the principal instruments through which companies pursue and implement their inorganic growth strategies. At the same time, M&A transactions may lead to structural concentration in the market, a reduction in the number of independently operating market participants and, ultimately, the emergence of monopolistic or oligopolistic market structures that may adversely affect consumer welfare. Accordingly, almost all legal systems worldwide, including Turkish law, subject M&A transactions that may significantly impede effective competition in the market to ex-ante regulatory scrutiny prior to their closing.

In Türkiye, the legal framework governing such scrutiny is primarily set out in Law No. 4054 on the Protection of Competition (the “Law“) and the Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board (the “Communiqué“). The authority of the Competition Board (the “Board“) to review M&A transactions should not be regarded merely as an administrative formality or a procedural step to be navigated in the course of a transaction. Rather, the Board’s approval constitutes a critical condition precedent that directly determines the legal validity and enforceability of the transaction. Failure to obtain the Board’s clearance, delays in the review process, or the granting of approval subject to certain structural or behavioural remedies may result in the abandonment of the transaction, a deterioration in the value of the target or the parties’ commercial expectations, or the imposition of significant administrative sanctions.

2. Legal Framework Governing Merger Control and Notifiable M&A Transactions
   1. Legal Framework

The legal basis for the review of M&A transactions from a competition law perspective is set out in Article 7 of the Law. In essence, a merger or acquisition that would result in a significant impediment to effective competition in any goods or services market within the whole or a part of the country may only become legally valid upon obtaining the approval of the Board. The categories of M&A transactions that are subject to the Board’s approval are regulated in detail under the Communiqué.

Accordingly, an M&A transaction may be subject to the Board’s approval even where none of the transaction parties are incorporated or established in Türkiye, provided that the contemplated transaction would lead to a significant impediment to effective competition in any goods or services market within the whole or a part of Türkiye.

1. M&A Transactions Subject to the Board’s Approval

From a systematic perspective, in order to determine whether an M&A transaction is subject to the approval of the Board, two cumulative conditions must be satisfied. First, the transaction must qualify as a merger or acquisition within the meaning of the Communiqué. Second, the transaction must exceed the turnover thresholds prescribed under the Communiqué. Where either of these conditions is not met, the relevant M&A transaction will not be subject to mandatory notification, and accordingly, obtaining the Board’s approval will not be required for the transaction to become legally valid.

1. 1. Transactions Qualifying as a Merger or Acquisition under the Law and the Communiqué

An M&A transaction will be deemed to constitute a merger or acquisition within the meaning of the Law and the Communiqué where it results in a lasting change in control, including in particular where the transaction leads to:

• the merger of two or more undertakings; or
• the direct or indirect acquisition of control, whether in whole or in part, of one or more undertakings, by one or more undertakings or by one or more persons who already control at least one undertaking, through the purchase of shares or assets, by way of contractual arrangements, or through any other means.

Transactions meeting the above criteria are regarded as mergers or acquisitions for the purposes of Turkish merger control rules.

1. 2. Turnover Thresholds

Following the recent amendments to the Communiqué, M&A transactions requiring the approval of the Board are those that meet the following turnover thresholds:

• Transactions where the aggregate Turkish turnover of the transaction parties exceeds TRY 3 billion, and the Turkish turnover of at least two of the transaction parties individually exceeds TRY 1 billion; or
• In acquisition transactions, where the Turkish turnover of the assets or business being acquired exceeds TRY 1 billion, and in merger transactions, where the Turkish turnover of at least one of the transaction parties exceeds TRY 1 billion, and the worldwide turnover of at least one of the other transaction parties exceeds TRY 9 billion.

For the purposes of calculating these turnover thresholds, the relevant economic units must be taken into account. In the case of a merger, the economic entities forming part of the merging undertakings are considered, whereas in the case of an acquisition, the relevant turnover includes that of the acquirer’s economic unit as well as the transferor and the economic entities controlled by the transferor.

Where the target company qualifies as a technology undertaking, the applicable turnover assessment differs depending on whether the undertaking is established in Türkiye.

• If the technology undertaking is established in Türkiye, the applicable turnover threshold for the technology undertaking is TRY 250 million instead of TRY 1 billion in acquisition transactions.
• If the technology undertaking is not established in Türkiye, the general turnover thresholds set out above will apply.

Under the Communiqué, undertakings operating in the fields of digital platforms, software and gaming software, financial technologies, biotechnology, pharmacology, agrochemicals and health technologies, as well as assets related thereto, are deemed to constitute technology undertakings for the purposes of merger control.

3. Notification Procedure and Review Process
   1. Notification Procedure

A notification may be submitted jointly by the transaction parties, or individually by any of the parties or their duly authorised representatives. Where the notification is filed by only one party, the notifying party is required to inform the other party of the filing.

Notifications must be made using the notification form annexed to the Communiqué. In the case of joint notifications, a single notification form is submitted. The notification form and its supporting documentation must also be prepared in electronic format and submitted to the Board either in person, by post, or through the e-Government system.

All information and documentation submitted to the Board must be accurate and up to date. Should any of the submitted information or documentation subsequently change, such changes must be promptly notified to the Board.

As the Board’s approval constitutes a condition for the legal validity of the transaction, the notification must be submitted prior to the completion of the share transfer or closing of the transaction, and the parties must await the Board’s clearance before consummating the transaction.

An exception applies where the transaction is completed through the acquisition of securities from different sellers by means of a series of transactions on a stock exchange. In such circumstances, the transaction may be notified after completion, provided that:

• the transaction is notified to the Board without delay; and
• the voting rights attached to the acquired securities are not exercised, or are exercised solely to preserve the full value of the investment, based on an exemption granted by the Board.

A notification is deemed to have been made on the date it is registered in the records of the Board. However, where the information requested in the notification form is incorrect, misleading or incomplete, or where amendments are made to such information, the notification will be deemed to have been made only on the date when the relevant information is duly completed or corrected.

In cases where the Board is required to seek the opinion of another public authority or institution, the applicable review periods will commence on the day following the date on which such opinion is received and registered in the Board’s records.

1. 2. Review Process

Following a preliminary review to be conducted within 15 days, the Board will either grant approval to the proposed merger or acquisition or, if it decides to initiate an in-depth investigation, notify the parties accordingly. In such a case, the Board will communicate its preliminary objections and inform the parties that the transaction will remain suspended until a final decision is rendered and may not be implemented during this period, together with any other measures deemed necessary. Such notification will be duly served on the relevant parties.

Where the Board fails to respond to the notification or take any action within the prescribed period, the notified merger or acquisition shall be deemed approved by operation of law, and the underlying agreements will enter into force and acquire legal validity 30 days following the date of notification.

During the course of its review, the Board may request additional information and documentation from the parties. Furthermore, where deemed necessary, the Board is authorised to conduct on-site inspections at the premises of undertakings and associations of undertakings.

At the conclusion of its assessment, if the Board determines that the notified M&A transaction does not give rise to competition concerns, it will grant approval for the transaction. Conversely, if the transaction is found to significantly impede effective competition, the Board may refuse to grant approval or, where the parties have offered commitments during the review process, may grant conditional clearance.

Such commitments must be capable of fully eliminating the identified competition concerns. In practice, the Board may therefore approve the transaction subject to the parties undertaking certain structural or behavioural remedies.

4. Sanctions for Infringement

An M&A transaction that is subject to mandatory notification is deemed to be legally suspended and without effect until the approval of the Board is obtained. In other words, the transaction is considered legally invalid until the Board’s clearance is granted. Where the Board becomes aware of a notifiable transaction that has not been duly notified, it may initiate an ex officio review of the transaction.

Various sanctions are regulated for M&A transactions that are completed without obtaining the Board’s approval despite being subject to mandatory notification (so-called “gun-jumping”). In this respect:

• If the Board concludes that the transaction does not significantly impede effective competition, it will grant clearance to the transaction; however, the undertakings, associations of undertakings, or the members of such associations will be subject to an administrative monetary fine equal to one-thousandth (0.1%) of their annual gross revenues generated in the financial year preceding the decision, or, where such revenues cannot be determined, in the financial year closest to the date of the decision, as determined by the Board.
• If the Board determines that the transaction significantly impedes effective competition, in addition to the aforementioned administrative fine, the Board may order the termination of the merger or acquisition, the elimination of all factual situations created in violation of the law, and the restoration of the status quo ante. In this context, the Board may require that any shares or assets acquired be returned to their former owners, where possible, or otherwise divested or transferred to third parties under conditions and within a timeframe to be determined by the Board. Until such transfer is completed, the acquirer may be prohibited from participating in the management of the acquired undertaking, and the Board may impose any additional measures it deems necessary.

For 2026, the minimum administrative monetary fine applicable in such cases is TRY 302,484.86.

5. Competition Board Approval as a Condition Precedent in Share Purchase Agreements

The lifecycle of an M&A transaction typically begins with the execution of a Letter of Intent (LoI) or a Memorandum of Understanding (MoU) between the parties, develops through a comprehensive due diligence process, and ultimately attains a formal legal framework with the execution of the principal transaction documents—most notably the Share Purchase Agreement (SPA) or, where applicable, the Asset Purchase Agreement (APA). However, in both Turkish and international M&A practice, the signing of the transaction documents (“Signing”) and the completion of the transaction (“Closing”)—namely, the transfer of ownership, payment of the purchase price, and the assumption of control over the target—do not typically occur simultaneously.

1. The Interim Period Between Signing and Closing

The primary reason why a significant period of time—sometimes exceeding one year—may elapse between signing and closing is the necessity to satisfy various legal, administrative and financial conditions precedent. For a transaction in Türkiye to proceed to closing, a number of prerequisites typically need to be fulfilled. These may include the finalisation of financing arrangements, the retention of key management personnel within the target company, the obtaining of third-party consents under “change of control” clauses contained in material commercial agreements, and—most importantly—the receipt of required regulatory approvals from competent administrative authorities, including the Board. Accordingly, Board clearance constitutes a mandatory and non-waivable condition precedent that must be expressly included in the SPA in respect of any notifiable M&A transaction.

1. Clean Team Arrangements

Particularly in acquisition transactions between competitors operating in the same market (i.e., horizontal transactions), the period between signing and closing presents significant competition law sensitivities. During this interim period, the parties’ engagement in integration planning or the sharing of information such as customer lists, pricing strategies or cost structures may constitute a serious infringement under Article 4 of the Law, which prohibits anti-competitive agreements and concerted practices. In order to mitigate these risks, M&A transactions frequently incorporate “Clean Team” arrangements. Under such arrangements, a designated group of external advisors or independent experts, who are isolated from the acquirer’s operational decision-making processes, are authorised to review the competitively sensitive information of the target company. The Clean Team analyses such information and provides the acquirer’s management only with summarised, anonymised or aggregated outputs, rather than disclosing the underlying raw data. In this manner, the acquirer is able to conduct a reliable commercial assessment of the target, while ensuring compliance with competition law restrictions on the exchange of competitively sensitive information.

6. Allocation of Competition Law Risks in the SPA
   1. Efforts Clauses

The obligations assumed by the parties in relation to obtaining competition clearance are typically defined in transaction documents through “efforts clauses.” In relatively low-risk transactions—such as those where the parties operate in non-overlapping markets or where their market shares are minimal—the parties generally agree to apply a “reasonable best efforts” or “commercially reasonable efforts” standard.

Under such a standard, the buyer is generally required to submit the relevant filing to the Competition Board in a timely manner, respond fully and promptly to the Board’s requests for information, and conduct the approval process in good faith. However, the buyer would not ordinarily be expected to undertake material divestitures, significantly curtail its commercial operations, or incur disproportionate costs solely for the purpose of obtaining clearance.

Where the transaction involves major market participants operating in the same market—for instance, a merger between two large retail chains—the seller may seek to impose a more demanding standard of conduct on the buyer in order to maximise the likelihood of obtaining regulatory approval. In such circumstances, the SPA may include “best efforts” clauses, pursuant to which the buyer undertakes to pursue the clearance process with the highest degree of diligence, including, where necessary, challenging a potential prohibition decision before the administrative courts, funding potentially lengthy legal proceedings, and continuing to pursue approval without abandoning the transaction prematurely.

1. 2. “Hell or High Water” Clauses and Break Fees

At the most aggressive end of contractual risk allocation are “Hell or High Water” clauses. In transactions where the likelihood of competition law obstacles is particularly high, the seller may seek to shift the entire regulatory risk of obtaining antitrust clearance onto the buyer. By agreeing to a Hell or High Water clause, the buyer effectively undertakes to secure Competition Board approval at any cost, including by accepting any structural or behavioural remedies that may be required by the Board—such as divesting assets, relinquishing market share, or granting licences over certain rights—without objection.

Such onerous obligations typically arise in competitive sale processes (auction processes) or in circumstances where the target company is considered highly strategic or valuable, enabling the seller to impose stricter contractual protections in the SPA.

In practice, private equity (PE) funds are often perceived as “clean” or low-risk buyers from a competition law perspective, as their investment portfolios typically do not include competing businesses. By contrast, strategic buyers operating within the same sector may present significantly higher antitrust risks. Where a seller elects to proceed with a potentially riskier strategic buyer, it may seek additional protection by requiring the buyer to agree to a substantial Antitrust Reverse Break Fee (or Antitrust Termination Fee), payable in the event that the transaction cannot be completed due to a failure to obtain the required competition clearance.

1. 3. Integration of Long-Stop Date and Material Adverse Change (MAC) Clauses

Competition law reviews may, at times, become unpredictably protracted. In particular, in-depth investigations (Phase II reviews) may continue for several months. In order to prevent the parties from remaining indefinitely bound to an uncertain transaction, SPAs typically include a “Long-Stop Date” clause. Under such a provision, if the required Competition Board clearance has not been obtained by the specified date, and the parties do not mutually agree to extend the deadline, either party will generally have the right to terminate the agreement without liability.

In addition, transaction documents commonly incorporate Material Adverse Change (“MAC”) clauses to address the risk that unforeseen developments may materially affect the value or viability of the target company during the regulatory review period. Such developments may include, for instance, a severe deterioration in macroeconomic conditions, a significant loss of market position by the target, or the occurrence of an unexpected crisis. MAC provisions are designed to provide the buyer with contractual flexibility, allowing it—where a material and unforeseen deterioration in the target’s business occurs while awaiting regulatory approval—to renegotiate the transaction terms or, in certain circumstances, withdraw from the transaction altogether.

7. Summary

While M&A transactions constitute an important instrument through which companies pursue inorganic growth strategies, they may also give rise to market concentration and, consequently, pose risks to the preservation of effective competition. For this reason, in Türkiye, M&A transactions exceeding certain thresholds are subject to ex-ante merger control under the Law and the Communiqué. Transactions that result in a lasting change of control and exceed the prescribed turnover thresholds acquire legal validity only upon obtaining the approval of the Board, which therefore constitutes a critical condition precedent in the context of M&A transactions.

Whether a transaction is subject to notification is determined by first assessing whether the transaction qualifies as a merger or acquisition within the meaning of the Communiqué, and subsequently whether the applicable turnover thresholds are exceeded. Where a notifiable transaction is completed without obtaining the required approval (“gun-jumping”), the transaction is deemed legally suspended and ineffective, and the parties may be subject to administrative monetary fines. Moreover, where the transaction is found to significantly impede effective competition, the authority may prohibit the transaction altogether or grant conditional clearance subject to structural or behavioural remedies.

In practice, competition authority approval plays a pivotal role in the management of transaction risk, particularly during the period between signing and closing. Accordingly, the uncertainties arising from competition law considerations are typically addressed in the SPA through a range of contractual mechanisms—such as efforts clauses, “hell or high water” provisions, long-stop date arrangements, MAC clauses, and, where appropriate, clean team mechanisms—thereby clearly allocating the relevant regulatory risks between the parties.