Mergers and Acquisitions

What we do in this area

This page is the part of our commercial and company law work devoted to company transfers. Our subject is not public company transactions; it is the transfers that happen every day in commercial life, such as the sale of a mid-sized business, a shareholder transferring their shares, the merger of two companies or the passing of a family company to the next generation.

The main work carried out:

• Structuring whether the transfer will be made through shares or through assets
• Drafting the share transfer agreement or reviewing the draft received from the other party
• Shareholders' agreement: management, profit distribution, transfer restrictions and exit mechanisms
• Pre-transfer legal due diligence and reflecting the findings in the price
• Mergers, divisions and conversions under the provisions of the Turkish Commercial Code No. 6102 (TTK)
• Planning the transfer of shares to the next generation in family companies

The first decision: share transfer or asset transfer

The same business can change hands in two different ways, and this choice determines debt exposure, the tax burden and the consents required from the outset.

In a share transfer, the buyer also takes over the company's past: known and unknown debts, pending cases, tax risks. In an asset transfer, the past as a rule remains with the seller; however, where the business is transferred with its assets and liabilities, the transferee becomes liable for the business's debts, and the transferor remains jointly liable with the transferee for two years (Article 202 TBK).

Registered-share transfers are subject to statutory and articles-of-association restrictions. Transfers of bearer share certificates require notification to the Central Securities Depository (MKK), in addition to delivery, to take effect against the company and third parties (Article 489 TTK).

Pre-transfer legal due diligence

This is the stage that shows what the transfer price is actually buying. The records typically examined in the review of a mid-sized company: the trade registry and share ledger, the articles of association and general assembly resolutions, key customer and supplier contracts, loans and security, land registry records of real estate, trade mark registrations, employment contracts, pending cases and enforcement proceedings.

The output of the review is not a list but a decision tool: every risk identified is either deducted from the price, secured through the seller's representations and warranties, or made a condition of closing. In a company whose share ledger has not been kept properly and whose chain of transfers is broken, the signing stage should not be reached until this defect is cured.

The set of contracts

Share transfer agreement. The main headings are the price and payment schedule; representations and warranties on the company's debt, litigation and tax position; the indemnity regime and limitations of liability; closing conditions and the non-compete. In a draft received from the other party, the part that most needs reading is usually not the price clause but the indemnity clause.

Shareholders' agreement. Where the transfer results in more than one group of shareholders in the company, a separate agreement is made between the shareholders alongside the articles of association: representation in management, decisions requiring unanimity, approval and pre-emption arrangements for share transfers, drag-along and tag-along rights, exit in the event of deadlock. In equal-share two-shareholder structures, defining the deadlock procedure in advance clarifies the available steps if disagreement arises. For our general approach to contract review: commercial contracts.

Mergers, divisions, conversions and family companies

Article 134 et seq. of the TTK subjects mergers, divisions and conversions to a specific procedure: the merger agreement and report, general assembly approval, registration with the trade registry and provisions on the protection of creditors. In acquisitions exceeding certain turnover thresholds, Competition Board clearance under Article 7 of the Law on the Protection of Competition No. 4054 also arises and must be assessed before the transaction closes.

In family companies, a transfer is more often generational planning than a sale. If shares are transferred to children without regard to the rights of heirs with a reserved share, the matter can turn years later into disputes over abatement (tenkis) and collusion (muvazaa); in these files company law is read together with family and inheritance law. For companies in an ongoing advisory relationship, this planning is done before a transfer is on the agenda: corporate legal advisory.

This is general information; every transfer is assessed on its own documents and shareholding structure.

The page where we describe the process in detail: Our working process.