Corporate Advisory & Mergers

Mergers and Acquisitions: The Legal Dimension of Strategic Partnerships

In today’s business world, strategic merger and acquisition decisions are of critical importance for companies to achieve sustainable growth and gain a competitive advantage. These processes require not only commercial consideration but also a solid legal infrastructure, planning, and expertise. Often referred to as a "Corporate Marriage", these mergers pave the way for a new structure formed by companies combining their strengths toward common goals.

With our team’s deep knowledge and extensive experience in mergers and acquisitions, we support your company in reaching its strategic goals, providing end-to-end transaction advisory services for both the buyer and seller sides, and standing by you at every stage of the process.

What Are Mergers?

Mergers mean combining the assets and resources of two or more companies under a single structure. This may occur either by one company dissolving its legal entity and transferring to another, or by all merging companies forming a new company together. The purpose of a merger can be to reduce competition, increase operational efficiency, strengthen the supply chain, or reinforce market position.

Types of Mergers and Process

According to the Turkish Commercial Code, mergers can be carried out in two ways:

Merger by Acquisition: One company takes over another with all its assets and liabilities. The acquired company’s legal entity is terminated.
Merger by Formation of a New Company: Multiple companies merge to form a new company, and all merging companies’ legal entities are terminated.

The merger process generally consists of the following steps:

Merger Agreement: Executed in writing between the parties.
Merger Report: Prepared by management bodies. In SMEs, it may not be mandatory in certain cases.
General Assembly Decision: Approval is obtained from the shareholders.
Registration and Announcement: Application is made to the trade registry and the merger is announced.

Which Companies Can Merge?

Capital companies can merge with other capital companies and cooperatives; they can merge with sole proprietorships only as the acquiring party.
Sole proprietorships can merge with their own type; they can merge with capital companies only as the acquired party.
Cooperatives can merge with capital companies and other cooperatives.

Companies in liquidation can participate in a merger if their assets have not yet been distributed. Insolvent companies may only merge with financially strong companies.

Simplified Merger

If both companies are capital companies, the merger process can be simplified. In this case, certain procedures such as preparing a merger report and obtaining general assembly approval may not be required.

Risks and Challenges

Every merger carries certain risks:

For consumers: Risk of market narrowing and monopolization.
For the acquiring company: Financial burden, cultural integration issues, and organizational complexity.
For the acquired company: Loss of market trust, employee turnover, uncertainty.

To mitigate these risks, the merger process should be carried out with detailed analysis and professional consultancy.

What Are the Advantages?

Tax incentives (Corporate Tax Law Art. 20)
Reducing competition and increasing market share
Continuity in raw material supply
Operational efficiency

Benefits of Merging with Foreign Companies

Mergers with overseas companies provide significant advantages in opening up to global markets and building strong partnerships in local markets. Sharing distribution channels, production facilities, and market access creates cost advantages and high profit potential.

The Role of the Lawyer

Since mergers involve complex legal processes, working with a lawyer specialized in corporate law from start to finish is crucial. Lawyers provide consultancy and representation in contract drafting, rights and share analysis, legal due diligence, registration procedures, and dispute resolution. Taking the right steps directly impacts the success of the merger.

Mergers are transformation processes that require not only financial and strategic considerations but also serious legal expertise. Correct guidance is critical to eliminating potential risks and maximizing the benefits of a merger.