Investors who want to explore various investment opportunities in Turkey
can opt for a company merger or acquisitio
n. These are two methods of uniting two or more companies and growing a business.
Foreign investments in Turkey
have increased over the past years and have also been encouraged by an evolving regulatory regime. A foreign corporation can buy existing Turkish companies
and the total investment volume resulted from these types or transactions is an important part of the total foreign investments in the country.
Law for mergers and acquisitions in Turkey
The Turkish Commercial Code contains provisions for the merger or acquisition process
as well as definitions between the two. According to law, the merger
is the establishment of a new commercial company
after two or more have been merged together. At least one of the companies is transferred with all its rights, obligations and assets and the company or companies being merged will be dissolved after the completion of the process.
According to the Turkish Commercial Code, mergers can take place after one company has bought the other (and assimilates it) or when two companies form a new legal entity.
Options for investors in Turkey
Investors who are interested in mergers and acquisitions on the Turkish market
must make the distinction between the two processes. The acquisition
is essentially the purchase of another company when typically a larger one buys a smaller company. After the transaction is complete, the assimilated corporation will cease to exist. The investor has an option to keep all or some of the employees
and hire them in the remaining (or newly formed) company.
Company mergers are the union of two existing companies that become a single operational legal form. This process is subject to more negotiation between the parties as per the shareholding agreements that will be concluded. Before entering into a company merger, investors are advised to perform a company due diligence in order to determine the true financial and legal situation of the company.
Our lawyers in Turkey
can give you more details regarding the company law and options available to foreign investors. You can also contact us
if you are interested in opening a company in Turkey.