Introduction

Acquiring a publicly held or listed Turkish company is fundamentally different from acquiring a privately held business.

In a private M&A transaction, the buyer and seller can negotiate the acquisition largely through a share purchase agreement and coordinate closing among a limited number of shareholders. In a public M&A transaction, the acquisition may affect hundreds or thousands of minority investors and therefore becomes subject to an additional layer of capital markets regulation.

The principal framework is established by the Capital Markets Law No. 6362, the regulations and communiqués of the Capital Markets Board of Türkiye (“CMB” or “SPK”), the Turkish Commercial Code and, for listed companies, the rules applicable to Borsa İstanbul and the Public Disclosure Platform (“KAP”).

One of the most important consequences of acquiring control of a Turkish public company is the potential obligation to make a mandatory tender offer to the remaining shareholders.

The current Takeover Bid Communiqué No. II-26.1 regulates both mandatory and voluntary tender offers in public companies. It establishes rules concerning control, offer procedures, pricing, equal treatment, disclosure, exemptions and competitive offers. (https://spk.gov.tr)

For an international investor, a Turkish public takeover should therefore be treated as a combination of an M&A transaction, securities-law transaction and regulatory process.

Private M&A and Public M&A

The commercial objective may be identical in both cases: acquiring control of a Turkish company.

The execution process is different.

In a private transaction, the buyer may acquire 70%, 90% or even 100% of a company directly from existing shareholders and negotiate the price individually with them.

Where the target is a public company, acquiring the controlling block may trigger obligations toward shareholders who are not parties to the original share purchase agreement.

This means that the actual acquisition cost may be substantially greater than the consideration paid to the controlling shareholder.

For example, an investor may negotiate the acquisition of a 60% controlling stake. If the acquisition creates management control and triggers a mandatory tender offer, the investor must also budget for the possibility that a significant portion of the remaining shareholders will tender their shares.

Accordingly, public M&A financing should be based not merely on the block acquisition price but also on the potential mandatory offer funding requirement.

Acquiring Control Through a Block Share Sale

One of the most common Turkish public M&A structures is the acquisition of a controlling shareholding from an existing major shareholder.

The transaction may initially resemble a private M&A deal.

The buyer and controlling shareholder negotiate a share purchase agreement addressing matters such as price, conditions precedent, warranties, regulatory approvals and closing.

However, if closing results in the buyer obtaining management control, the capital markets consequences begin immediately.

The buyer may become obligated to offer to purchase shares held by the remaining investors pursuant to the Capital Markets Law and the Takeover Bid Communiqué.

For this reason, the SPA should not be drafted independently from the mandatory tender offer analysis.

What Constitutes Management Control?

Management control is not determined only by economic ownership.

Under the current Takeover Bid Communiqué, management control is generally considered acquired where a person, alone or together with persons acting in concert, directly or indirectly holds more than 50% of the voting rights.

Management control may also exist regardless of the voting percentage where privileged shares provide the right to elect the absolute majority of the board of directors or to nominate candidates for that majority.

This distinction is particularly important in Turkish companies with privileged share classes.

An investor acquiring less than 50% of the economic capital may nevertheless obtain management control because of voting or board appointment rights.

Conversely, the existence of a large minority holding does not necessarily mean that management control has legally changed.

The articles of association and the rights attached to each share class should therefore be analysed before signing.

Control Through Shareholder Agreements

Management control can also arise through contractual arrangements.

An investor may acquire shares together with rights under a shareholders’ agreement that effectively determine board composition or strategic governance.

The SPK expressly recognises that management control may arise through private written agreements between shareholders even where there is no simultaneous change in the formal ownership percentage. The SPK’s current guidance for public companies specifically notes that a mandatory tender offer obligation may arise where shareholders obtain management control through private written agreements. (https://spk.gov.tr)

This makes shareholders’ agreements particularly sensitive in public M&A.

A governance provision that appears to provide only investor protection in a private company may have takeover consequences when used in a public company.

Acting in Concert

The mandatory tender offer rules also take account of persons acting together.

A buyer cannot necessarily avoid a control finding by dividing the acquisition among several affiliated entities or coordinated investors.

The Takeover Bid Communiqué contains rules identifying circumstances in which persons are considered to be acting together for the purpose of determining management control and takeover obligations. It also takes direct and indirect ownership into account when analysing control.

Accordingly, the analysis should consider the entire buyer group rather than the nominal purchaser alone.

Private equity sponsors should pay particular attention where several funds, special purpose vehicles or co-investors participate in the transaction.

Indirect Acquisition of Control

A Turkish public takeover can occur even where the investor does not directly purchase shares in the Turkish listed company.

Suppose a foreign company owns a controlling interest in a Turkish listed subsidiary.

If an investor acquires control of the foreign parent, it may indirectly acquire control of the Turkish public company.

The Takeover Bid Communiqué specifically addresses circumstances in which control of a target public company is indirectly obtained through acquisition of management control of its parent company.

Cross-border M&A transactions should therefore include a Turkish public-company analysis even where the Turkish listed company is several levels below the company being acquired internationally.

A transaction negotiated entirely outside Turkey may still create Turkish takeover consequences.

Mandatory Tender Offer

A mandatory tender offer is intended to protect remaining shareholders after management control changes.

Instead of forcing minority shareholders to remain invested under a new controlling owner, the regime gives them an opportunity to sell their shares in accordance with the statutory tender offer framework.

The mandatory tender offer cannot simply be made on whatever terms the buyer prefers.

The offer is subject to the CMB process, disclosure requirements, pricing rules and procedural deadlines.

The Takeover Bid Communiqué also provides that a mandatory tender offer cannot be made subject to conditions.

Once the obligation exists, the investor therefore cannot generally state that it will purchase minority shares only if a specified percentage accepts the offer.

Mandatory Tender Offer Application Deadline

Timing is critical.

Under the current Communiqué, a person obtaining management control must apply to the Capital Markets Board for the tender offer within six business days following acquisition of management control.

The actual tender offer process must generally begin within two months from the date on which the obligation arose, subject to the possibility of additional time being granted by the Board in appropriate circumstances.

Once the CMB approves the tender offer information form, the actual offer must begin within a maximum of six business days.

The acceptance period must be no shorter than ten business days and no longer than twenty business days.

These deadlines should be incorporated into the acquisition timetable before closing occurs.

Consequences of Failing to Make the Mandatory Offer

Ignoring the mandatory tender offer obligation can have consequences beyond an administrative procedural problem.

The Communiqué provides for administrative sanctions where the mandatory offer is not completed within the required period. It also provides for the freezing of voting rights of persons subject to the unfulfilled tender offer obligation and persons acting together with them under the circumstances prescribed by the legislation.

This means that failure to complete the offer can directly affect corporate control.

An investor may have paid for the controlling block but subsequently find that its ability to exercise the related voting rights has been restricted.

Tender offer compliance should therefore be treated as an integral component of acquisition execution.

Mandatory Tender Offer Price

The mandatory tender offer price is governed by regulatory rules rather than being determined entirely through negotiation with minority shareholders.

The objective is to prevent a controlling shareholder from receiving a premium while minority investors are subsequently offered a materially inferior economic exit.

The applicable price analysis may take account of the consideration paid in the transaction creating control, relevant market prices and other factors specified in the Communiqué.

The exact calculation should be performed for the particular acquisition structure, including transactions denominated in foreign currencies.

The current Communiqué contains specific rules regarding foreign-currency transactions, delay adjustments and circumstances where shares are acquired at a price above the tender offer price during the relevant period.

The buyer should therefore calculate the potential tender offer price before signing the controlling-share SPA.

Equal Treatment of Shareholders

Equal treatment is an important principle of the tender offer regime.

The Communiqué requires shares belonging to the same class of the target company to receive equal treatment in the tender offer.

The investor should therefore be cautious about arrangements that economically provide selected minority shareholders with a superior exit outside the regulated tender offer process.

Side agreements, additional payments or arrangements with selected shareholders may affect pricing analysis and regulatory compliance.

Acquiring Shares at a Higher Price During the Offer Process

The investor’s share purchases during the takeover period can also affect the tender offer price.

Under the current Communiqué, if the bidder or persons acting together with it purchase target shares at a price higher than the tender offer price during the relevant period, the tender offer price must be increased so that it is not below the higher price paid.

Where some shareholders have already tendered at the earlier lower price, the difference must be paid in accordance with the regulatory mechanism.

This prevents the bidder from offering one price publicly while privately purchasing equivalent shares at a higher price.

Trading by the investor group should therefore be controlled during the acquisition process.

Exemptions and Circumstances Where an Offer May Not Be Required

Not every transaction resulting in a technical change in control necessarily produces a mandatory tender offer obligation.

The Communiqué identifies circumstances in which the obligation is deemed not to arise and circumstances in which an exemption may be requested from the CMB.

Examples addressed by the current rules include certain transfers between persons already acting together, specific capital increase situations, some involuntary changes in voting control, particular restructuring situations and certain acquisitions arising from enforcement of bank security. The Communiqué also allows applications for exemptions in specified circumstances.

These provisions should be interpreted narrowly.

The parties should not assume that a transaction qualifies for an exemption merely because no minority shareholder appears economically disadvantaged.

Where an exemption application is necessary, it should be incorporated into the signing and closing timetable.

Voluntary Tender Offers

Turkish capital markets legislation also permits voluntary tender offers.

An investor may choose to make an offer to shareholders even where it does not yet have a mandatory offer obligation.

A voluntary offer may be used as an acquisition strategy where control is dispersed among many shareholders or where the bidder wishes to acquire a substantial position directly through the market.

The current Takeover Bid Communiqué regulates voluntary offers, including changes to the price or scope of the offer and competing offers made by third parties. (https://spk.gov.tr)

The commercial structure of a voluntary takeover may therefore differ significantly from a negotiated block acquisition.

Competing Offers

Public M&A creates the possibility of competing bidders.

The current Communiqué expressly regulates competitive tender offers.

A third party may make a competing offer during the acceptance period of the initial voluntary tender offer, subject to the applicable procedural requirements. The rules also address the relationship between the acceptance periods and circumstances in which shareholders that accepted the first offer may withdraw their acceptance before the underlying share transfer has occurred.

This distinguishes public M&A from many bilateral private transactions.

A bidder may spend substantial time negotiating a transaction only to face competing interest once the proposed acquisition becomes public.

KAP Disclosure

Public-company acquisitions are subject to extensive disclosure requirements.

For shares traded on Borsa İstanbul, material developments are generally disclosed through the Public Disclosure Platform (KAP).

The CMB states that special circumstances within the scope of the applicable disclosure rules must generally be announced through KAP immediately when they arise or become known, unless a specific rule provides otherwise.

Changes concerning the capital structure or management control of a listed company must be disclosed using the applicable form no later than 09:00 on the third business day following the transaction. (https://spk.gov.tr)

The disclosure timetable must therefore be coordinated with SPA signing, regulatory announcements and closing.

Signing Disclosure and Closing Disclosure

A public acquisition may require disclosure at several stages.

The fact that the share transfer has not yet closed does not automatically mean that the transaction can remain confidential until closing.

Depending on the circumstances, signing of a binding SPA, material conditions precedent, regulatory applications, changes in transaction terms and completion may each have disclosure implications.

The transaction team should therefore create a disclosure strategy before signing.

Corporate lawyers, capital markets counsel and investor relations teams should coordinate the language.

An inaccurate or incomplete announcement can create securities-law exposure even where the underlying acquisition agreement is commercially valid.

Confidentiality Before Announcement

Public M&A creates tension between transaction confidentiality and market disclosure.

The parties generally wish to keep negotiations confidential while due diligence and pricing discussions continue.

At the same time, information capable of affecting the price or investment decisions concerning listed shares may fall within capital markets disclosure rules.

Access to transaction information should therefore be strictly controlled.

The transaction team should maintain appropriate confidentiality arrangements, insider access controls and records concerning persons receiving sensitive information.

External advisers, lenders and potential consortium members should also be subject to appropriate confidentiality restrictions.

Due Diligence of a Listed Company

Legal due diligence remains essential in public M&A, but access to information may be more sensitive than in a private acquisition.

The buyer may review confidential information that is not available to ordinary market investors.

This can affect whether the buyer or its advisers may trade in the target’s securities before information becomes public.

The due diligence process should therefore include capital markets compliance procedures in addition to ordinary confidentiality agreements.

Where the buyer and target are competitors, competition-law restrictions on exchange of commercially sensitive information should also be considered.

Public Information Review

A listed target already has substantial information available publicly.

Before requesting confidential documents, the buyer should review public sources such as KAP disclosures, financial statements, independent audit reports, articles of association, general assembly information and publicly available CMB disclosures.

This can make listed-company due diligence more efficient.

It also allows the buyer to compare management representations with information previously disclosed to investors.

Material inconsistencies should be investigated carefully because they may indicate both transaction risk and potential securities-law issues.

Target Board Considerations

The board of a listed target must continue acting in accordance with its statutory duties throughout the takeover process.

Management should not treat the company as though it already belongs to the proposed buyer before closing.

Actions taken during the transaction should consider the interests of the company and the applicable capital markets framework.

Particular care is required with related-party arrangements, information sharing, pre-closing integration and transactions that could materially affect the target before control legally transfers.

Where Competition Authority approval is required, premature coordination can also create gun-jumping concerns.

Financing the Tender Offer

Financing should account for both the initial block acquisition and the subsequent tender offer.

Suppose an investor pays EUR 150 million for a controlling interest but the remaining shares potentially subject to the mandatory offer represent another EUR 70 million.

The investor should not structure acquisition financing around the EUR 150 million payment alone.

The financing package may need to include funds for the maximum potential tender participation.

The CMB application process also requires information and documentation concerning the tender offer, and the bidder should be able to demonstrate that the offer can be implemented in accordance with the applicable rules. (https://spk.gov.tr)

Foreign Investors and Public Takeovers

Foreign investors may acquire listed Turkish companies subject to the general foreign investment framework and sector-specific restrictions.

The public status of the target does not create a general prohibition against foreign control.

However, regulated sectors may require additional approval.

A public acquisition should therefore combine analysis of capital markets legislation with sector regulation, foreign investment rules and merger control.

The acquisition vehicle should also be established sufficiently early to complete CMB applications, banking arrangements and regulatory filings.

Competition Authority Clearance

A takeover of a listed company may also constitute a concentration requiring Turkish Competition Authority approval.

The CMB tender offer regime and merger-control regime address different legal concerns.

Capital markets rules protect shareholders and the integrity of the securities market.

Competition rules protect competitive market structure.

Compliance with one does not eliminate the need to comply with the other.

Where Competition Authority approval is required, the SPA should make completion conditional upon clearance and the public takeover timetable should be coordinated accordingly.

Important Transactions and Appraisal Rights

Public companies are also subject to special rules concerning significant corporate transactions.

Certain mergers, demergers and major asset transactions may constitute material transactions under the Capital Markets Law and CMB regulations.

The current CMB framework regulates the board and shareholder approval procedure for such transactions and, where applicable, the rights of qualifying shareholders to exit at a fair price.

The CMB’s guidance on material transactions explains that specified mergers and demergers and sufficiently significant asset transactions may fall within this regime. (https://spk.gov.tr)

This becomes relevant where an acquisition is followed by a restructuring of the listed target.

Post-Acquisition Merger

A bidder acquiring control may ultimately wish to integrate the listed company into another group company.

This may involve a statutory merger.

Such a transaction must be analysed independently under the Turkish Commercial Code and capital markets legislation.

A controlling shareholder cannot assume that acquiring 60% or 70% of the shares permits it to eliminate the listed company informally.

Minority shareholder rights, material transaction requirements, corporate approvals and CMB rules remain applicable.

Squeeze-Out and Sell-Out Rights

Turkish capital markets law provides a separate mechanism where ownership becomes highly concentrated.

Under the currently applicable Communiqué on Squeeze-Out and Sell-Out Rights No. II-27.3, a shareholder acting alone or together with persons acting in concert becomes the controlling shareholder for this specific regime where its voting rights reach at least 98%.

Reaching the 98% threshold, or acquiring additional shares while already above that level, can trigger both the controlling shareholder’s squeeze-out right and the remaining shareholders’ sell-out right, subject to the exceptions and procedure established by the Communiqué.

This is separate from the threshold used to determine management control for the mandatory tender offer regime.

The distinction is important:

more than 50% may be sufficient for management control and mandatory tender offer analysis, while 98% is the relevant current threshold for the squeeze-out/sell-out regime.

Exercising Sell-Out Rights

Once the 98% threshold is reached in the manner contemplated by the Communiqué, remaining shareholders receive the right to require the controlling shareholder to purchase their shares.

The current rules establish a valuation and procedural process, including disclosure and a limited period for exercising the sell-out right.

Following the expiry of the sell-out period, the controlling shareholder may proceed with the squeeze-out procedure in accordance with the Communiqué.

Investors seeking eventual 100% ownership should therefore consider this process at the beginning of the acquisition rather than only after the initial control transaction closes.

Delisting

An investor may ultimately want to take the company private.

Delisting should not be treated as an automatic consequence of acquiring control.

The applicable capital markets procedures must be followed.

The CMB’s current framework connects the delisting process in relevant circumstances with the exercise of squeeze-out and sell-out rights under the applicable regulations. (https://spk.gov.tr)

Accordingly, a private equity investor intending to acquire, restructure and eventually delist a Turkish listed company should model the entire process before determining the acquisition price.

Representations and Warranties in Public M&A

The buyer purchasing a controlling block may receive warranties from the selling shareholder.

These can address title, authority, financial statements, tax, material contracts, litigation, employees, compliance and other matters.

However, minority shareholders tendering their shares through the public tender process do not generally provide the same extensive warranty package.

The buyer therefore acquires additional shares largely on the basis of the statutory tender process rather than individually negotiated SPAs with every minority investor.

This makes due diligence and protection under the controlling shareholder SPA particularly important.

Minority Shareholder Protection

Minority shareholder protection is one of the central reasons public M&A differs from private M&A.

The legal framework seeks to prevent a control transaction from benefiting only the controlling seller while leaving dispersed shareholders without appropriate protection.

Tender offer rights, equal treatment, disclosure requirements, appraisal rights and sell-out mechanisms operate alongside general Turkish corporate-law protections.

A buyer should therefore consider minority rights as part of transaction economics rather than an issue that arises only after closing.

Post-Closing Governance

After completion of the controlling acquisition, the investor may seek board representation and changes in management.

These steps must follow applicable corporate procedures.

The company remains a separate legal entity and remains subject to its public-company obligations until it validly exits that regime.

The new controller should therefore ensure continued compliance with financial reporting, audit, disclosure, corporate governance and securities-market obligations.

Acquisition of control does not suspend the target’s duties as a listed company.

Post-Closing Disclosure

Changes following closing may themselves require KAP announcements.

The CMB’s current listed-company guidance requires disclosures concerning matters capable of affecting securities prices or investment decisions and contains specific rules concerning changes in shareholding structure and management control. (https://spk.gov.tr)

The buyer should therefore establish a post-closing disclosure and compliance process rather than leaving the target’s previous investor relations system unchanged without review.

Common Public M&A Risks

Public takeovers often become problematic because the buyer treats the transaction as though it were an ordinary private SPA.

The controlling-block acquisition may be legally straightforward while the wider transaction is not.

Typical problems include overlooking the mandatory tender offer, incorrectly determining the control threshold, failing to aggregate persons acting in concert, ignoring indirect control, underestimating tender offer funding, trading target shares at prices affecting the offer price, delaying KAP disclosure, mishandling confidential information, completing before competition or sector approvals, and assuming that control automatically permits squeeze-out or delisting.

These risks should be addressed at structuring stage rather than after the controlling shares have already transferred.

Practical Public M&A Checklist

Before acquiring control of a Turkish public or listed company, an investor should generally:

1. Determine the target’s public and listed status.
2. Analyse each class of shares and voting privileges.
3. Identify the current controlling shareholder.
4. Determine whether the transaction creates management control.
5. Review shareholders’ agreement and board appointment rights.
6. Analyse persons acting in concert and indirect ownership.
7. Determine whether a mandatory tender offer will arise.
8. Model the maximum tender offer funding requirement.
9. Calculate the preliminary mandatory offer price.
10. Assess whether an exemption or non-triggering circumstance applies.
11. Plan CMB application deadlines.
12. Prepare the KAP disclosure strategy.
13. Establish confidentiality and insider-information controls.
14. Conduct legal, financial and capital markets due diligence.
15. Assess Competition Authority clearance.
16. Review sector-specific approvals.
17. Coordinate block acquisition and tender offer financing.
18. Plan board and governance changes after closing.
19. Analyse the 98% squeeze-out and sell-out regime if full ownership is intended.
20. Prepare any longer-term merger, delisting or take-private strategy separately.

Conclusion

Public M&A transactions in Turkey require considerably more than negotiating a share purchase agreement with the controlling shareholder.

The acquisition of management control may trigger a mandatory tender offer to the remaining shareholders. Under the current CMB framework, control generally includes ownership of more than 50% of voting rights, alone or together with persons acting in concert, as well as specified rights enabling control of the majority of the board. The mandatory tender offer application must generally be made within six business days after control is obtained, and the subsequent offer is conducted under a detailed regulatory timetable.

Disclosure is equally important. Listed companies operate within the KAP disclosure system, and changes concerning capital structure and management control are subject to specific public-announcement requirements. (https://spk.gov.tr)

Investors seeking complete ownership should also distinguish the mandatory offer regime from the squeeze-out regime. Under the currently applicable II-27.3 Communiqué, the squeeze-out and corresponding sell-out threshold is 98% of the voting rights.

A successful Turkish public takeover should therefore integrate corporate M&A, securities regulation, merger control, financing, disclosure and minority shareholder protection from the beginning.

The key question is not simply “How can the investor buy the controlling shares?” but rather “What legal obligations arise once those shares are acquired, and what will it cost to complete the entire control transaction?”