By Av. Serkan Kara, Istanbul Bar No. 53770. Last updated: 14 June 2026.
A merger or acquisition under Turkish law is governed primarily by the Turkish Commercial Code No. 6102, which sets the rules for share transfers, statutory mergers, demergers, and the board and shareholder approvals that make a deal binding, while large transactions also require merger-control clearance from the Turkish Competition Authority under Competition Law No. 4054. The deal becomes legally effective at distinct moments depending on its structure: a share acquisition closes when the shares are validly transferred and recorded, while a statutory merger takes effect on registration with the trade registry. Everything before that point, namely due diligence, the share or asset purchase agreement, the representations and warranties, and the regulatory filings, is where value is protected and risk is allocated. The sections below answer the questions cross-border buyers, sellers, and general counsel ask most, in the order they usually arise.
What is the difference between a merger and an acquisition?
A merger and an acquisition are distinct legal transactions under the Turkish Commercial Code No. 6102. In a statutory merger, two or more companies combine so that one surviving entity absorbs the other, the absorbed company dissolves without liquidation, and its assets and liabilities pass by universal succession on registration with the trade registry. In an acquisition, one party buys controlling shares or selected assets of a target that legally continues to exist, often as a subsidiary. The distinction drives shareholder-approval requirements, tax treatment, creditor protection, employee continuity, and how third-party contracts carry over, so the structure should be chosen before heads of terms are signed, not after.
How does an M&A transaction work in practice?
An M&A transaction runs through a defined sequence under the Turkish Commercial Code No. 6102 and the Code of Obligations No. 6098, from a preliminary agreement to a binding definitive agreement and closing. The legally operative step is the valid transfer of shares (or the merger registration), and the contractual protections that matter most are negotiated before that moment. A typical cross-border deal moves through the stages below.
- Letter of intent or term sheet. The parties record the headline commercial terms, an exclusivity period, and confidentiality obligations. Most of the document is non-binding, but the confidentiality and exclusivity provisions are intended to bind and are drafted to be enforceable under the Code of Obligations No. 6098.
- Legal due diligence. The buyer investigates the target’s corporate records, share ledger, material contracts, litigation, intellectual property, employment arrangements, tax position, data-protection compliance under the Personal Data Protection Law No. 6698 (KVKK), and regulatory standing. The findings shape price, structure, the representations and warranties, and the indemnity package.
- Definitive agreement. The parties sign a share purchase agreement (SPA) or asset purchase agreement (APA) setting the price, closing conditions, representations and warranties, indemnities, restrictive covenants, and the dispute-resolution clause.
- Conditions precedent. Closing is made conditional on items such as merger-control clearance under Competition Law No. 4054, third-party and lender consents, and required corporate approvals.
- Closing. The conditions are satisfied, the price is paid through documented banking channels, the shares are transferred and recorded in the share ledger (or the merger is registered with the trade registry), and post-closing integration begins.
A buyer or seller who cannot attend in person can act through a notarised and, where executed abroad, apostilled power of attorney granted to Turkish counsel, which is a common structure for cross-border parties.
Should you do a share deal or an asset deal?
The choice between a share acquisition and an asset acquisition is the first structural decision in most Turkish M&A transactions, and it changes which liabilities transfer, what consents are needed, and how the deal is taxed. In a share deal the buyer steps into the existing company and inherits its history; in an asset deal the buyer takes selected assets and only the liabilities it agrees to assume. The table compares the two on the points that most often decide the structure. Treat tax outcomes as set by the tax legislation in force and confirm the current treatment with counsel rather than assuming a fixed figure.
| Factor | Share acquisition | Asset acquisition |
|---|---|---|
| What transfers | The whole company, including its assets and all liabilities, known and unknown | Only the specific assets and the liabilities the buyer expressly assumes |
| Hidden liabilities | Pass to the buyer with the shares; managed through warranties and indemnities | Largely left behind with the seller, subject to statutory exceptions |
| Third-party consents | Often fewer, though change-of-control clauses in key contracts can still apply | More numerous, as material contracts and permits frequently need consent to assign |
| Employees | Employment relationships generally continue with the same employer entity | Transfer of the workplace may move affected employees with preserved terms under labour law |
| Typical use case | Buying a healthy operating company as a going concern | Distressed targets, or buying one business line out of a larger group |
Neither structure is inherently superior. The right answer depends on the target’s liability profile, the consents at stake, and the tax position, which is why the structuring decision is taken alongside due diligence rather than after it.
What does legal due diligence cover?
Legal due diligence is the buyer’s primary risk tool, and a thorough review examines the target across corporate, contractual, employment, intellectual property, tax, data-protection, and litigation dimensions. Corporate due diligence confirms valid incorporation, the capitalisation and share ledger, shareholder agreements, and that the proposed sale is properly authorised under the Turkish Commercial Code No. 6102. Contract due diligence flags change-of-control, assignment, and termination clauses that the transaction could trigger. Employment, intellectual property, tax, and data-protection review under the Personal Data Protection Law No. 6698 (KVKK) identifies undisclosed liabilities. The output feeds directly into the price, the deal structure, and the representations, warranties, and indemnities in the definitive agreement.
What are the key legal requirements and protections?
Every Turkish M&A transaction must satisfy corporate-authorisation and, above certain thresholds, merger-control requirements, and the buyer’s commercial protection comes from the warranty and indemnity package in the SPA. Board and shareholder approvals must be obtained as the Turkish Commercial Code No. 6102 requires for the chosen structure, and a statutory merger additionally requires creditor-protection steps and registration with the trade registry. Representations and warranties, covering the accuracy of accounts, title to shares or assets, validity of material contracts, ownership of intellectual property, and legal compliance, form the contractual backbone; their breach triggers indemnification, typically subject to caps, baskets, and de minimis thresholds negotiated in the agreement. Warranty and indemnity insurance is increasingly used to transfer the financial risk of warranty breaches to an insurer and give the seller a cleaner exit.
When does competition clearance apply?
A transaction that meets the turnover thresholds set by the Turkish Competition Authority requires pre-closing merger-control clearance under Competition Law No. 4054, and closing before clearance can expose the parties to penalties and to the transaction being treated as legally ineffective. The Authority assesses whether the deal would significantly impede effective competition, in particular by creating or strengthening a dominant position. The thresholds are set by regulation and are revised periodically, so confirm the figures in force at the time of filing rather than relying on an older number. Multi-jurisdictional deals frequently require parallel filings, for example under the EU Merger Regulation or, for US-nexus transactions, the Hart-Scott-Rodino Act, and these reviews must be sequenced so that no jurisdiction’s standstill obligation is breached.
How are cross-border M&A disputes resolved?
Cross-border M&A agreements usually resolve disputes by arbitration, and an arbitration seated in Turkiye is governed by the International Arbitration Law No. 4686, while a resulting award is enforced across borders under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Parties commonly choose institutional arbitration under the ICC Rules or the Istanbul Arbitration Centre (ISTAC), with the UNCITRAL Arbitration Rules available for ad hoc proceedings. Where a dispute is litigated instead, jurisdiction and the applicable law are determined under the Code of Civil Procedure No. 6100 and the Act on Private International and Procedural Law No. 5718, and a money judgment is enforced through the Enforcement and Bankruptcy Law No. 2004. The dispute-resolution clause should be drafted at the SPA stage, not improvised after a deal turns adversarial.
What are the most common M&A risks?
The recurring risks in M&A are valuation gaps, regulatory and foreign-investment screening, post-closing integration, and minority-shareholder conflict, and each is addressed by specific drafting in the definitive agreement. Valuation disputes over intangible assets or contingent liabilities are bridged with earn-out clauses and purchase-price adjustment mechanisms, which themselves need precise calculation methodology and post-closing conduct covenants to avoid later argument. Regulatory risk arises where merger control under Competition Law No. 4054 or sector-specific foreign-investment screening can impose conditions or block a deal. Integration risk is managed through transition-services agreements and retention arrangements. Minority and deadlock risk is governed by the protections in the shareholders agreement and the Turkish Commercial Code No. 6102, including drag-along, tag-along, and pre-emption rights, which should be reviewed before signing.
Frequently asked questions
How long does an M&A transaction take?
Timelines depend on deal complexity and the regulatory clearances required. A clean private share acquisition with no merger-control filing can complete in a matter of months, while a cross-border deal needing clearance under Competition Law No. 4054 and parallel foreign filings takes longer because the standstill period runs until the relevant authorities clear the transaction. Confirm the current review periods with counsel, as they are set by the authorities and can change.
Can regulators block an M&A deal in Turkiye?
Yes. The Turkish Competition Authority can prohibit or impose conditions on a transaction that significantly impedes effective competition under Competition Law No. 4054, and a deal closed before required clearance can be treated as legally ineffective with penalties. Sector-specific foreign-investment screening can also restrict acquisitions in sensitive areas. Early competition analysis is essential to assess approval risk and design remedies before signing.
What happens to employees in a merger or acquisition?
The outcome depends on the structure. In a share acquisition the employer entity is unchanged, so employment relationships generally continue uninterrupted. In an asset acquisition or a statutory merger, transfer-of-workplace rules under Turkish labour law can move affected employees to the acquirer with their accrued terms preserved. Due diligence should identify key-employee retention needs and any undisclosed employment liabilities before closing.
What is an earn-out and why is it used?
An earn-out is a contingent part of the purchase price paid after closing if the target meets agreed financial or operational milestones. It is used to bridge a valuation gap where buyer and seller disagree on future performance. Because earn-outs frequently generate post-closing disputes, the SPA must define the calculation method, the measurement period, and the seller’s protections over how the business is run after closing.
Is foreign-currency funding documentation required?
Cross-border consideration is paid through documented banking channels, and the parties should plan the funds flow and currency conversion early because lender consents, exchange-control documentation, and tax treatment all turn on how and where the price is paid. Treat any specific tax or exchange figure as set by the legislation in force and confirm it at the time of the transaction rather than relying on an older guide.
Talk to cross-border M&A counsel
Serka Law Firm advises corporations, private equity funds, institutional investors, and founders on the full M&A lifecycle, from structuring and due diligence through negotiation, merger-control clearance, closing, and post-closing disputes. For a transaction-specific scope, see our corporate and commercial law advisory service, or explore related guidance on company legal consulting, shareholder deadlock and dispute remedies, and competition law and merger control. If you are still choosing a vehicle, our guide to choosing an LLC or a joint stock company sets out the options for foreign investors.
General information, not legal advice. Turkish law; verify your specific situation with qualified counsel.