Mergers and Acquisitions (M&A) in Türkiye: Process, Agreements and Merger Control

Buying a company is often buying a history rather than an asset. The company's contracts, employees, tax records, pending cases and permits pass to the buyer together with the shares. In mergers and acquisitions (M&A), the role of the law is to make that history visible, to reflect correctly in the contract how price and risks are shared between the parties, and to complete the transaction with the necessary approvals.

The legal sources are scattered: Turkish Commercial Code No. 6102 (TTK) governs corporate transactions, Law No. 4054 on the Protection of Competition governs merger control, Capital Markets Law No. 6362 governs public companies, and Labour Law No. 4857 governs the transfer of employees. Corporate Tax Law No. 5520 is relevant for tax aspects, and Foreign Direct Investment Law No. 4875 for foreign investors.

Choosing the transaction structure

The same commercial result can be reached in different ways, and each has different legal consequences.

Share purchase: The buyer acquires the company's shares; the company remains as it is with its legal personality, and its debts and contracts continue with it.
Asset or business transfer: The buyer acquires only certain assets or the business. Which debts pass can be determined in a more controlled way, but a separate transfer may be needed for each contract, permit and property.
Merger, demerger, conversion: TTK Arts. 136–158 govern mergers, Arts. 159–179 demergers and Arts. 180–190 conversions. In these transactions, assets pass by universal succession, and special procedures apply to protect creditors and shareholders.

Tax consequences are also decisive in choosing the structure. The Corporate Tax Law provisions on mergers, transfers, demergers and share exchanges (Arts. 19–20) provide a framework that, under certain conditions, defers the tax burden of these transactions. Whether these conditions are met should be assessed together with a financial adviser or tax adviser when planning the transaction; for details, see the Tax and Customs Law page.

Opening negotiations: letter of intent and confidentiality

The parties usually first sign a non-disclosure agreement (NDA), then record the main commercial terms in a letter of intent (LOI) or term sheet. It should be stated clearly which provisions of these documents are binding. While price and structure usually remain non-binding statements of intent, provisions on confidentiality, exclusivity, sharing of costs and governing law are treated as binding. As a document thought to be non-binding may, depending on its content, take on the character of a preliminary contract, the wording should be chosen carefully.

Legal due diligence

Legal due diligence is the stage at which the buyer learns what condition the company is in. The documents in the virtual data room opened by the seller are reviewed, question lists are answered, and the findings are collected in a report. The review usually covers:

Constitutional documents, share register, general meeting and board resolutions, pledges and restrictions on shares
Material contracts, especially provisions granting termination or consent rights on a change of control
Real estate, land register records, mortgages and annotations; licences and permits
Employees, employment contracts, social security filings and pending employment cases
Tax audits, administrative fines, compliance with personal data protection rules
Intellectual property rights, domain names and software licences
Pending litigation, enforcement proceedings and potential disputes

The purpose of the report is not only to list problems. At this stage it is decided whether each risk identified will be reflected in the price, remedied before closing or covered by a specific indemnity clause in the contract.

The backbone of the transaction is the share purchase agreement (SPA). It sets out the price and payment structure, price adjustment (closing accounts or locked box), conditions precedent to closing and undertakings regarding the ordinary course of business until closing.

Representations and warranties, indemnity

The representations and warranties given by the seller about the company's condition are the main tool covering risks the buyer could not see in due diligence. The agreement regulates in detail up to what amount, within what period and by what procedure the buyer can claim indemnity if a representation proves untrue, including caps and floors, de minimis thresholds and notice periods. Where a specific risk has been identified, a separate specific indemnity is preferred.

Conditions to closing and material adverse change

Competition Board approval, third-party consents or certain restructuring steps may be made conditions to closing. The scope of the material adverse change (MAC) clause, which allows the buyer to withdraw if a development seriously affecting the company's value occurs between signing and closing, is one of the most sensitive points in negotiations.

Deferred and performance-based consideration

In earn-out structures, where part of the price depends on the company's future performance, a post-closing dispute is almost inevitable unless the calculation method, the seller's involvement in management during the period and assurances that the buyer will not run the company so as to reduce the consideration are clearly set out.

If the seller remains a shareholder in the company, a shareholders' agreement (SHA) is also made. Board representation, veto rights on important decisions, share transfer restrictions and exit mechanisms are regulated in this agreement and aligned with the articles of association. The company law aspects of these matters are discussed on the Commercial and Corporate Law page.

Competition Board approval

Article 7 of Law No. 4054 provides that mergers and acquisitions exceeding certain thresholds are subject to Competition Board approval. The thresholds are set by Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board. The thresholds were updated by amending Communiqué No. 2026/2, published in the Official Gazette of 11 February 2026. Accordingly, approval is required if the parties' aggregate Turkish turnover exceeds TRY 3 billion and the Turkish turnover of at least two parties each exceeds TRY 1 billion, or if, in an acquisition, the Turkish turnover of the asset or business being acquired (in a merger, of one of the parties) exceeds TRY 1 billion and the worldwide turnover of one of the other parties exceeds TRY 9 billion. For acquisitions of technology undertakings established in Türkiye, the TRY 1 billion thresholds apply as TRY 250 million.

Carrying out a transaction subject to approval without approval may result both in the transaction not acquiring legal validity and in an administrative fine. Approval is therefore included in the agreement as a condition to closing, and the time needed to prepare the notification is built into the transaction timetable from the start. Which undertakings are taken into account in calculating turnover is determined according to the Authority's guidelines; the threshold calculation should be made separately for each transaction.

Public companies

If the target company's shares are traded on the stock exchange, capital markets legislation comes into play. Acquiring shares giving management control as a rule triggers an obligation to make a tender offer to the other shareholders (Law No. 6362, Art. 26). The existence of negotiations and the stages of the transaction are also assessed separately in terms of public disclosure obligations and inside information rules. For details, see the Capital Markets page.

Employees and transfer of undertaking

In a share purchase, the employer does not change, so employment contracts are not affected automatically. In a transfer of the workplace or part of it, however, employment contracts pass to the transferee with all rights and obligations; the transferor and transferee employers are jointly liable for two years for debts that arose before the transfer and were due on the date of transfer (Law No. 4857, Art. 6). The transfer alone is not a valid reason for termination. How obligations relating to employees are allocated in the transaction documents should be considered together with the issues on the Employment and Social Security Law page.

Closing and beyond

At closing, the price is paid, the shares are transferred, entries are made in the share register and the necessary registry filings are made, and changes to the board of directors are registered. For foreign investors, information obligations under Law No. 4875 are also fulfilled at this stage. After closing, price adjustment accounts are finalised, and claims based on representations and warranties are raised within the notice periods in the agreement. Entering these periods in the calendar is necessary so that rights are not lost if a problem arises later.

Our work in this area

On the buyer or seller side, we work on structuring the transaction, preparing confidentiality and intent documents, legal due diligence and reporting, drafting and negotiating share purchase and shareholders' agreements, coordinating the Competition Board notification process, closing and following up post-closing claims. For arbitration and litigation in disputes arising from the transaction, see the Dispute Resolution page.

Main topics

Legal due diligence and reporting
Letters of intent, confidentiality and exclusivity agreements
Share purchase (SPA) and shareholders' agreements (SHA)
Mergers, demergers and conversions under the TTK (Arts. 136–190)
Competition Board approval and notification (Law No. 4054, Art. 7)
Mandatory tender offers in public companies (Law No. 6362, Art. 26)
Position of employees in a transfer of undertaking (Law No. 4857, Art. 6)
Closing, post-closing compliance and indemnity claims

Frequently asked questions

How do you choose between a share purchase and a business transfer?

In a share purchase, the company changes hands as it is, with all its debts and contracts; the transaction is completed with a single transfer. In a business or asset transfer, the elements to be acquired can be selected, but a separate transfer may be needed for each contract and permit. Tax consequences, non-transferable permits and identified risks are assessed together in making the choice.

Is Competition Board approval required for every acquisition?

No. Approval is required only for transactions that exceed the turnover thresholds set in Communiqué No. 2010/4 and result in a change of control. The calculation should be made separately for each transaction according to the thresholds updated by Communiqué No. 2026/2. Completing a transaction subject to approval without approval raises the issues of the transaction's validity and an administrative fine.

Is a letter of intent binding?

Whether a letter of intent is binding depends on its content and wording. In practice, the parts on price and structure are drafted as non-binding statements of intent, while provisions such as confidentiality and exclusivity are binding. This should be stated clearly in the document.

What happens if a tax debt emerges later in the company we acquired?

In a share purchase, the company's tax liabilities for past periods remain with the company. The buyer's protection against this risk lies in the representations and warranties and indemnity provisions in the share purchase agreement. The claim must be notified to the seller within the period and in the manner provided in the agreement.

What happens to employees' seniority rights in a transfer of undertaking?

In a transfer of undertaking, employment contracts pass to the transferee employer with all rights and obligations, and employees' seniority continues. The transferor and transferee are jointly and severally liable for two years for debts that arose before the transfer and were due on the date of transfer (Law No. 4857, Art. 6). Liability for severance pay is determined separately under Article 14 of Law No. 1475, which remains in force.

Legislation and sources

The information on this page is general and does not constitute legal advice. As legislation may change, the current rules must be assessed separately for your particular situation.

Mergers and Acquisitions