Mergers and
Acquisitions

The target’s shareholding structure and corporate documents, key customer and supplier contracts, obligations towards employees, intellectual property rights, data protection compliance, permits and licences, and pending and potential litigation. The risks identified are reported in order of importance and reflected in the price, the deal structure or the protections in the agreement.

For technology companies the most critical heading is usually intellectual property: whether the software and the brand really belong to the company.

In a share deal, the company changes hands with all its rights and liabilities. In an asset deal, only the selected assets and contracts are acquired. The choice depends on the target’s past liabilities, whether permits and licences can be transferred, the position of the employees, and the tax consequences.

Because they are the buyer’s main protection against risks the due diligence could not uncover. The seller makes a series of statements about the company’s condition; if a statement turns out to be untrue, the buyer claims compensation. What is really negotiated is less the statements themselves than the cap on liability, the claim period and the exclusions.

No, only where the parties’ turnover exceeds the thresholds in the communiqué. For acquisitions of technology companies active in Turkey, however, the target turnover threshold does not apply, so even small start-up acquisitions may need to be notified.

A transaction closed without clearance is not only fined, it also has no legal validity. Whether notification is needed should be assessed at the very start, at the letter of intent stage.

Updating the share ledger and the trade registry, changes in management, informing employees and sending change-of-control notices under contracts are the work of the first weeks. If a price adjustment or earn-out has been agreed, calculating it can take months. Non-compete and confidentiality obligations also continue during this period.