Turkish Competition Authority publishes its M&A Overview Report for 2021

New development

On 7 January 2022, the Turkish Competition Authority’s (“ Authority “) Mergers and Acquisitions Overview Report for 2021 (“ Report “) was published on the Authority’s website. ^[1] The Report includes a comprehensive overview of merger control in Turkey in 2021 by providing statistics of merger control cases in 2021 and comparisons with previous years.

Letting the numbers talk

In 2021, the Competition Board (“ Board “) examined a total of 309 mergers and acquisitions and the total value of the notified transactions was approximately TRY 5.8 trillion. ^[2] Both the number and the value of the notified transactions in 2021 increased dramatically (compared to 220 transactions with a total value of TRY 2.7 trillion ^[3] in 2020). One of the reasons for this increase could be the devaluation of the Turkish lira and, thereby, the decrease in the turnover thresholds in terms of foreign currencies.

The Report includes the following findings:

• Six transactions were found to be out of scope, because they did not result in a change of control, while two transactions were categorized within the information note category.
• While there were no privatization deals subject to the Board’s review in 2020, seven privatization deals were reviewed in 2021.
• In 2021, more transactions (i.e., 52) solely concerned Turkish companies, as in 2020 there were 30 transactions between Turkish companies. In parallel, the total value of such transactions (i.e., TRY 15.9 billion ^[4] ) increased, as they accounted for TRY 6.6 billion ^[5] in 2020.
• The Board also reviewed more foreign-to-foreign transactions (i.e., 175) in 2021 compared to 139 in 2020. This also significantly changed the total value of such transactions, as they accounted for TRY 5.6 trillion ^[6] in 2021, whereas the total was TRY 2.7 trillion ^[7] for 2020.
• In 2021, the Board reviewed more transactions (i.e., 67) between Turkish and foreign entities, as there were 38 for 2020. In this context, the total value of such transactions increased to TRY 29.8 billion ^[8] in 2021, from TRY 21.9 billion ^[9] in 2020.
• Foreign investors invested in Turkish companies in 50 separate transactions. In terms of the origin of these investors, Luxembourg ranked in first place with 10 transactions, followed by the US and the UK with six and five transactions respectively. In 2020, Germany came in first place with five transactions and Luxembourg and the UAE were in second place with four transactions each.
• In terms of the sectoral distribution of the transactions, as in 2020, the “production, transmission and distribution of electricity” sector was in first place with 14 transactions in 2021. On the other hand, the transaction with the highest value was realized in the “production of plastic packaging materials” market.
• In 2021, the Board decided to take only two transactions to Phase II review ^[10] and in the same period, three transactions were allowed within the framework of the commitments submitted by the submission parties. ^[11]

Conclusion

The Report takes a snapshot of the mergers and acquisitions in 2021 and shows that there has been a dramatic increase in both the number of notified transactions and the transaction value. This trend might continue considering the average exchange rates for 2021, i.e., more transactions are expected to be caught by the turnover thresholds.

[1] Available at https://www.rekabet.gov.tr/Dosya/geneldosya/2021-bd-gorunum-raporu-pdf .

[2] Approximately EUR 554 billion and USD 652 billion converted at the exchange rate EUR 1 = TRY 10.47 and USD 1 = TRY 8.89 in accordance with the Turkish Central Bank average buying exchange rate applicable for 2021.

[3] Approximately EUR 336 billion and USD 385 billion converted at the exchange rate EUR 1 = TRY 8.03 and USD 1 = TRY 7.01 in accordance with the Turkish Central Bank average buying exchange rate applicable for 2020.

[4] Approximately EUR 1.52 billion and USD 1.79 billion.

[5] Approximately EUR 822 million and USD 941 million.

[6] Approximately EUR 535 billion and USD 630 billion.

[7] Approximately EUR 336 billion and USD 385.

[8] Approximately EUR 2.8 billion and USD 3.4 billion.

[9] Approximately EUR 2.7 billion and USD 3.1 billion.

[10] Based on the information available on the Authority’s official website, one transaction concerns the acquisition of sole control of Willis Towers Watson Public Limited Company by Aon plc, but the second transaction has not been disclosed on the Authority’s website.

[11] Based on the information available on the Authority’s official website, the relevant transactions concern: (i) the acquisition of the shares of HAL Optical Investments B.V., a wholly owned subsidiary of HAL Holding N.V., in GrandVision N.V. by EssilorLuxottica S.A.; (ii) the acquisition of sole control of hydraulic business of Eaton Corporation plc by Danfoss A/S; and (iii) the Aon/Willis transaction.