Under Turkish law, a prior approval of the Turkish Competition Authority ("TCA") is required for merger and acquisition transactions that may result in a change of control on the Turkish market. The analysis for the notification requirement is carried out by taking into consideration the monetary thresholds that are set out in Turkish Lira ("TRY") under the Communiqué on the Mergers and Acquisitions requiring the Approval of the Competition Board, numbered 2010/4 (the "Communiqué").
In this respect, the calculation of non-Turkish turnover is usually made by the TCA on the basis of year-end financials, by taking into account the yearly average exchange rate for the relevant currency as published by the Turkish Central Bank at the beginning of the following year. It should be remembered that the EUR/USD corresponding figures have significantly dropped over the past few years due to the constant devaluation of the Turkish lira against foreign currencies.
The below chart reflects the EUR/USD figures for the alternative triggering thresholds, based on the 2018 average exchange rates against the Turkish lira (respectively 5.66 for EUR and 4.81 for USD)1 :
Taking into consideration the fact that the Turkish lira has continued to lose value since the beginning of 2019, it is likely that the above EUR/USD corresponding figures will have continued to decrease by the end of this year.
1 In any case, the applicable rates should be verified on a case-by-case basis.
In compliance with Turkish bar regulations, opinions relating to Turkish law matters that are included in this client alert have been issued by Özdirekcan Dündar Şenocak Avukatlık Ortaklığı, a Turkish law firm acting as correspondent firm of Gide Loyrette Nouel in Turkey.
This client alert is not intended to constitute legal advice and should not be taken as a recommendation to take action or withhold from taking action.