[Last updated: 1 January 2025, unless otherwise noted]

2.1 Main legal framework

The main rules and principles of Turkish law relating to public M&A in public companies can be found in:

• The Capital Markets Law No. 6362 (the "Capital Markets Law");
• The Capital Markets Board (the "CMB") of Türkiye's Communiqué on Tender Offers No. II-26.1 ("Tender Offer Communiqué"), setting out the general rules for tender offers, i.e., takeover bids, consisting of mandatory tender offers (an "MTO") and voluntary tender offers (a "VTO");
• The CMB's Communiqué on Material Transactions and Shareholders' Put Option Rights No. II-23.3 (the "Material Transactions Communiqué"), setting out corporate governance procedure for certain transactions including delisting of public companies;
• The CMB's Squeeze-Out and Sell-Out Rights Communiqué No. II-27.3 (the "Squeeze-Out Communiqué"), setting out squeeze-out requirements;
• The CMB's Communiqué on Mergers and Demergers No. II-23.2, setting out the merger and demerger rules that are applicable when at least one party is a public company; and
• The Turkish Commercial Code No. 6102 (the "TCC"), setting out, among other things, the general corporate governance principles applicable for all companies.

The Direct Foreign Investments Law No. 4875, sets out the framework for investments made by foreign investors. Foreign investments are not restricted in Türkiye and are not subject to any prior governmental approval unless they are related to certain regulated sectors such as finance, energy, telecommunications, civil aviation and insurance. They are also subject to equal treatment with domestic investors.

2.3 Other rules and principles

While the aforementioned legislation contains the main legal framework for public M&A in Türkiye, there are a number of additional rules and principles that are to be taken into account when preparing or conducting a public M&A transaction, such as:

1. The CMB's Public Disclosure Communiqué No. II-15.1 (the "Disclosure Communiqué"), setting out the framework for the public disclosures to be made in respect of public companies and capital markets instruments. The CMB has also published a set of guidelines (the "Disclosure Guidelines") to clarify the implementation of the Disclosure Communiqué's relatively general disclosure requirements, providing examples.
2. The CMB's Communiqué on Market Manipulation No. VI-104.1 (the "Market Manipulation Communiqué"). Articles 103 to 116 of the Capital Markets Law provides for general rules and principles relating to capital markets violations and crimes while the Market Manipulation Communiqué provides detailed guidelines for insider trading and market manipulation (the so- called market abuse rules).
3. The CMB's Share Communiqué No. VII-128.1, the CMB's Communiqué No. II-5.1 on Prospectus and Issuance Certificate and the CMB's Communiqué No. II-5.2 on Offering of Securities provide rules relating to public offering of securities and the admission of these securities to trading on a regulated market.
4. M&A in regulated sectors, e.g., banking, civil aviation, energy, insurance, other financial institutions and telecommunications, may be subject to approval or notification requirements as applied by their respective regulators.
5. The Competition Law No. 4054, setting out, among other things, merger control requirements and principles as applied by the Turkish Competition Board.
6. The Communiqué on Mergers and Acquisitions Requiring the Competition Board's Approval No. 2010/4, setting out the merger control requirements in detail and thresholds, and other procedural requirements as applied by the Turkish Competition Board also apply. The Turkish Competition Board's Communiqué No. 2022/2 on Amending Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Requiring the Approval of the Turkish Competition Board ("Amending Communiqué") sets out significantly increased turnover thresholds triggering mandatory merger control filing. Jurisdictional turnover thresholds will be triggered if (i) combined domestic turnover of the parties exceed TRY 750 million and domestic turnover of each of at least two parties exceeds TRY 250 million; or (ii) worldwide turnover of one party exceeds TRY 3 billion and (in the case of an acquisition) target's domestic turnover exceeds TRY 250 million or (in the case of a merger only) domestic turnover of one other party exceeds TRY 250 million. Also, the TRY 250 million threshold will not apply to acquisitions of technology firms, which: (i) are active or have R&D activities in the geographical market of Türkiye; or (ii) provide services to users in Türkiye. Technology firms are defined as "undertakings that have activities in the areas of digital platforms, software and game software, financial technologies, biotechnology, pharmacology, agriculture chemicals and health technologies, or assets related thereto. The Amending Communiqué entered into force on 4 May 2022.

Also, please note that with the amendment published in the Official Gazette on 19 April 2022 amending the Communiqué No. 2008-32/34 on the Decree No. 32 on the Protection of the Value of Turkish Currency, it is no longer possible to pay the purchase price in foreign currency in respect of share sales between parties that are resident in Türkiye. The parties may still determine the purchase price in a foreign currency or index it to a foreign currency in the contract. The payment, however, must still be made in Turkish lira.

Tender offers and squeeze-out procedures are subject to the supervision and control of the CMB. The CMB is the capital markets and securities regulator in Türkiye.

The CMB has a number of legal tools that it can use to supervise and enforce compliance with the tender offer and squeeze-out rules, including administrative fines and suspension of voting rights in case of a failure to initiate an MTO. In addition, criminal fines could be imposed by the courts in case of non-compliance resulting in one of the crimes set out under the Capital Markets Law, such as insider trading or market manipulation.

2.5 General principles

1. Tender offers

   The following general principles apply to tender offers in Türkiye:

   1. the acquisition of management control of a public company triggers the MTO obligation;
   2. only those who are shareholders as of the date on which the acquisition of management control is disclosed to the public will be able to sell their shares to the acquirer;
   3. all holders of the securities of the target of the same class must be afforded equivalent treatment;
   4. the holders of the securities of the target must have sufficient time and information to enable them to reach a properly informed decision on the offer;
   5. the target's board must act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of the offer;
   6. false markets must not be created in the securities of the target concerned by the offer in such a way that the rise or fall of the prices of the securities becomes artificial and the normal functioning of the markets is distorted;
   7. an offeror must announce an offer only after ensuring that he/she can fulfil any cash consideration in full, if such is offered, and after taking all reasonable measures to secure the implementation of any other type of consideration where the CMB can request a guarantee from banks or other parties for the consideration;
   8. the offer price must be fairly determined for MTOs using the mandatory methods under the Tender Offer Communiqué; and
   9. an offeror must satisfy the public disclosure requirements for initiating and carrying out the tender offer.
2. Squeeze-out

   The following general principles apply to squeeze-out bids in Türkiye:

   1. if a shareholder or a group of shareholders of a public company acting in concert become owner of at least 98% of the voting rights of a public company, the shareholder or the group of shareholders have the right to squeeze out the minority shareholders after the put right exercise period;
   2. the minority shareholders will have the right to put their shares to the majority shareholder within two months once the majority shareholder discloses to the public the share valuation report which it will prepare within one month at the latest once it becomes eligible to squeeze-out minority shareholders;
   3. the majority shareholder can call the minority shares and squeeze-out the minorities, and the target is automatically delisted following the expiration on the three-month period;
   4. the price for both the exercise of the put right and squeeze-out must be fairly determined in accordance with the same formula prescribed by the CMB; and
   5. the payment for the minority shares is required to be made in cash and Turkish lira.

2.6 Proposed reforms

There is no publicly available information on proposed reforms relating to tender offers or squeeze-outs.