The Turkish Competition Authority’s status report on mergers & acquisitions in 2020
he Turkish Competition Authority on its official website has recently published the annual M&A status report of the Head of the Economic Analysis and Research Department for 2020. The report provides an outline on the statistics of merger control decisions with regard to (i) the number of transactions, (ii) the parties’ country of origin, (iii) the activities of the parties, and (iv) transaction values.
Breakdown of reviewed M&A transactions
In 2020, the Turkish Competition Board examined a total of 220 M&A transactions, an increase of approximately 6% compared to the previous year’s figure, 208. According to the report, the average number of transactions reviewed during the last eight years (i.e., 2013–2020) was 204. Based on this statistic, the figure of 2020 is clearly higher than the average, despite the effects of the Covid-19 outbreak.
The Authority’s annual statistics show that in total, the Board rendered 355 decisions in 2020, of which 220, or approximately 62%, were M&A deals reviewed by the Board. Moreover, in 2020, there was no privatisation deals examined by the Board.
Of the 220 transactions, 30 concentrations involved Turkish legal entities only, whereas at least one of the parties was established under Turkish law in 38 transactions. Although 132 deals occurred abroad, the Competition Board reviewed them given their capability of indirectly affecting markets in Turkey. Furthermore, 75 transactions targeted an undertaking established and originating in Turkey.
The total value of the transactions involving both parties established abroad amounted to TL 2,669 billion (approx. EUR 300 billion), while transactions in which all of the parties were established in Turkey totalled TL 6,632 million (approx. EUR 743 million). In 2019, these figures were TL 2,855 billion and TL 6.246 million respectively.
The total value of transactions where the target (either being acquired or subject to the establishment of a joint venture) originated in Turkey was TL 29.2 billion (approx. EUR 3.25 billion), which is below the TL 25.7 billion average for the previous eight years. This figure was TL 42.9 billion (approx. EUR 4.72 million) in 2019, representing 91 transactions.
Breakdown of investors by countries
In 2020, foreign investors invested in Turkish companies within the scope of 34 transactions. Germany ranked first among foreign investors in 2020 with five transactions, followed by Luxembourg and United Arab Emirates each with four transactions, and the USA with three transactions. Notably, while Japan was ranked first in the previous year with seven transactions, only one transaction involved investors from Japan in 2020. In a similar manner, although France ranked second in 2019 with five M&A deals, there were no investments from France in 2020. The report reveals that no investor from the UK, Bermuda, China, Spain or Norway invested in Turkish companies in 2020, even though there were investments from these countries in the previous year.
Breakdown of the transactions by economic activities
Similar to the transactions reviewed by the Board in 2019, M&A transactions that concerned the “production, transmission and distribution of electricity” ranked highest in 2020, with seven transactions and a total value of TL 1.4 billion (approx. EUR 157 million). This amount corresponds to around 25% of the total value of M&A transactions in Turkey in 2020. Remarkably, despite the fact the transactions realised in terms of “other specialised wholesale” were valued higher (at TL 3.7 billion (approx. EUR 407 million)), this total represents only five transactions. These two sectors are followed by “computer programming, consultancy and related activities” (with four transactions); and “manufacture of motor vehicles”; “insurance”; “manufacture of basic pharmaceuticals”; and “construction of residential and non-residential buildings” (each with three transactions).
Duration of M&A reviews, Phase II reviews and conditional approvals/rejections
Further to the report, the Board’s average review period during which it concluded its examination of a notified concentration was approximately 18 days following the last notification date, compared with an average review period of 14 days in 2019 and 15 days in 2018. The Board typically makes at least one request for additional information, which interrupts the review period and pushes back the date of the final notification. The 18-day average includes the period starting from the submission of a complete filing.
In 2020, the Board decided to take only three transactions to a Phase II review. Of the three transactions that were found problematic under the applicable dominance and/or SIEC tests, two were conditionally approved by the Board based on remedies submitted by the transaction parties, and only one was rejected by the Board.
 Concerning the remaining decisions rendered between January and December 2020, competition violations made up 18% of Competition Board decisions. While negative clearance/exemptions made up 10% of the Board’s decisions; 0% of decisions were rendered following a court decision; and the remaining 10% were classified as others.