Spotlight on Turkish merger review

All the questions

Merger Review

The main legislation relating to the review of mergers is Article 7 of the Competition Act and Communiqué No. 2010/4 on mergers and acquisitions requiring the approval of the Competition Council. Following the amendment to Article 7 of the Competition Act, to align with EU law, the Significant Impediment to Effective Competition (SIEC) test was adopted by the system Turkish Competition Law, replacing the “dominant position” test for mergers or acquisitions.

i Significant cases

The scope of the SIEC test encompasses the effects that may result from merger and acquisition transactions and these are assessed not only in terms of the creation or strengthening of a dominant position, but also of a significant reduction in competetion. These latter effects are also prohibited, although they cannot result in the creation or strengthening of a dominant position. Following the application of the SIEC test to the proposed acquisition of 50 per cent of the shares and exclusive control of Marport by Terminal Investment Limited Sàrl, the TCB concluded that the transaction would result in a significant lessening of competition. TCB concluded that the market had a narrow oligopolistic structure and that the operation (port management for container handling services) could have negative effects on terminal and line operations. The decision shows that a more detailed competitive analysis will be carried out for mergers and acquisitions transactions that would have been considered less risky before the change in the competition law, the SIEC test being one of the most important elements of this approach. With this test, TCB will now use the new analysis system to significantly prevent the lessening of effective competition, instead of focusing only on transactions that would create or strengthen a dominant position.

TCB has conditionally accepted the merger between Obliet.com and Biletal.com, two companies operating in the online ticket sales comparison market. Regarding the food industry, CLA Milk and Dairy Products (CLA Süt ve Süt Ürünleri Gıda) was authorized to take over assets, including real estate, designated machinery and equipment, trademarks and other intellectual property rights , domain names and social media accounts, and stock agreed by the parties, with respect to factories producing SEK-branded milk and dairy products owned by Tat Gıda. Finally, in the online platform industry, maintaining its rapid growth both in Turkey and abroad, Getir started partnership negotiations for the N11 shopping platform in August 2021. At the beginning of 2022, the TCA approved the purchase of certain N11 shares through a capital increase. , paving the way for Getir to buy an undisclosed part of N11.com.

ii Trends, developments and strategies

In 2021, a total of 309 mergers and acquisitions (M&A) and privatization transactions were reviewed by the TCA. There has been an increase in the number of M&A transactions reviewed by the TCA in 2021 compared to 2020. Among these, most of the transactions in which the target company is from Turkey were reported in the area of the “production, transmission and distribution of electrical energy”. (14 transactions), and the highest transaction value was reported in the field of “manufacture of plastic packaging materials”, at around 3.7 billion lira.

iii Outlook

Following the amendment to the Competition Act, a stricter approach is to be expected from the TCA. The adoption of the SIEC test will allow the TCA to have a say in international M&A transactions that may affect Turkish markets. In particular, M&A transactions in oligopolistic markets will be carefully scrutinized by the TCA, due to their potential to significantly lessen effective competition.

Sharon P. Juarez