Acquisition or merger transactions by firms operating in the market may bring about various benefits such as products offered at lower prices, development of new products or increase in quality. However, such transactions also pose the risk of decreasing the competition in the market by creating or strengthening a dominant position. Such merger and acquisition transactions which increase prices for customers, decrease variety and undermine innovation are prohibited under Article 7 of the Act No. 4054.
Cases which are considered as merger and acquisition under Article 7, mergers or acquisitions requiring the authorization of the Competition Board, and the procedures and principles concerning the notification thereof to the Competition Board are regulated by the Communiqué on the Mergers and Acquisitions Calling for the Authorization of the Competition Board
(Communiqué No. 2010/4).
In determining whether a merger/acquisition falls under Article 7 of the Act, the concept of control is taken into account. Control may be acquired through rights, contracts or other instruments which grant the power to exercise decisive influence – de facto or de jure – over an undertaking. Hence, only those mergers/acquisitions involving a permanent change in control are considered under Article 7. In other words, a merger of undertakings which are within the same economic entity, which are controlled by the same persons or undertakings, or an acquisition taking place between these undertakings do not lead to a change of control; thus, they do not fall under Article 7.
As regards mergers/acquisitions which result in a change of control, turnover thresholds have been determined by the Communiqué on the Mergers and Acquisitions Calling for the Authorization of the Competition Board (Communiqué No. 2010/4). Mergers and acquisitions by undertakings whose turnovers in the relevant market are above the specified thresholds can only be legally valid following the authorization of the Competition Board. Within this framework, as a rule, an application must be made to the Competition Authority for authorization for merger/acquisition transactions which involve a change in control and which exceed the thresholds laid out in the Communiqué no 2010/4.