Turkey’s Competition Board has taken an important step in harmonizing merger and acquisition regulations with the European Union, as new rules come into effect with the start of 2011. The board will from now on look to the revenue levels in mergers, instead of both revenue and market share. The new rules are expected to boost M&As in Turkey
 A Petrol Ofisi fuel station is seen in this file photo. The sale of 54 percent of Petrol Ofisi, Turkey's biggest fuel retailer, to Austria's OMV for 1 billion euros ranks among the biggest M&A deals of 2010. Hürriyet photo |
Turkey has taken an important step in harmonizing its regulations on mergers and acquisitions, or M&As, according to a statement from the head of the Competition Board.
New rules involving M&A transactions that should be approved by the board are in effect as of the start of the new year. The new rules call for M&As to be approved or disapproved in accordance with revenues, not market share.
The board’s new regulation is based on the “revenue threshold” system, as opposed to the previous “market share and revenue threshold” system. Thus M&A transactions may be easier in the following period.
The new rules say that transactions in which the total Turkey revenues of parties exceed 100 million Turkish Liras, or in which at least two of the parties involved have separate Turkey revenues of 30 million liras, will have to be approved by the Competition Board. Also, if the global annual revenue of one party exceeds 500 million liras and at least one of the other parties’ Turkey revenue exceeds 5 million liras, approval will be necessary.
Transactions that do not have an effect on a given market, even if the revenue threshold is surpassed, will not need regulatory approval, except joint ventures. This rule stipulates that M&As involving parties that have no vertical or horizontal relation will not need to be approved.
Public disclosure
Another important clause of the reform is that the public will be notified of transactions that come in front of the Competition Board.
The notification form that must be submitted to the board has also changed. In the new period, two notifications, one a summary of the transaction, will be submitted. In some instances, the board will be able to ask for more detailed information regarding the transaction.
Speaking to Anatolia news agency, Nurettin Kaldırımcı, president of the Competition Board, said that under the previous regulation, some companies forgot to notify the board of deals, while some were fined as their applications came in the aftermath of a merger or acquisition.
“The new regulation will bring ease-of-use for both the board and the companies,” Kaldırımcı said. “We will be more active, as the work burden will lessen.”
It is not easy to measure market share and the revenue threshold is a more effective mechanism, according to Kaldırımcı. “This is the system in the European Union countries, too.”
“We are already keeping an eye on the risk of consolidation through other mechanisms,” Kaldırımcı said, adding that the revenue threshold will be higher for foreign companies.
The Competition Board plans to publish guidelines to help companies that wish to know more about M&A regulations.
New rules involving M&A transactions that should be approved by the board are in effect as of the start of the new year. The new rules call for M&As to be approved or disapproved in accordance with revenues, not market share.
The board’s new regulation is based on the “revenue threshold” system, as opposed to the previous “market share and revenue threshold” system. Thus M&A transactions may be easier in the following period.
The new rules say that transactions in which the total Turkey revenues of parties exceed 100 million Turkish Liras, or in which at least two of the parties involved have separate Turkey revenues of 30 million liras, will have to be approved by the Competition Board. Also, if the global annual revenue of one party exceeds 500 million liras and at least one of the other parties’ Turkey revenue exceeds 5 million liras, approval will be necessary.
Transactions that do not have an effect on a given market, even if the revenue threshold is surpassed, will not need regulatory approval, except joint ventures. This rule stipulates that M&As involving parties that have no vertical or horizontal relation will not need to be approved.
Public disclosure
Another important clause of the reform is that the public will be notified of transactions that come in front of the Competition Board.
The notification form that must be submitted to the board has also changed. In the new period, two notifications, one a summary of the transaction, will be submitted. In some instances, the board will be able to ask for more detailed information regarding the transaction.
Speaking to Anatolia news agency, Nurettin Kaldırımcı, president of the Competition Board, said that under the previous regulation, some companies forgot to notify the board of deals, while some were fined as their applications came in the aftermath of a merger or acquisition.
“The new regulation will bring ease-of-use for both the board and the companies,” Kaldırımcı said. “We will be more active, as the work burden will lessen.”
It is not easy to measure market share and the revenue threshold is a more effective mechanism, according to Kaldırımcı. “This is the system in the European Union countries, too.”
“We are already keeping an eye on the risk of consolidation through other mechanisms,” Kaldırımcı said, adding that the revenue threshold will be higher for foreign companies.
The Competition Board plans to publish guidelines to help companies that wish to know more about M&A regulations.
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