Mergers and Acquisitions (M&A)

What is Mergers and Acquisitions (M&A)?

To explain the difference between a merger and an acquisition in simple terms, a merger; Legally and economically, two or more companies merge to form a new company, and takeover can be defined as the joining of one or more companies to another existing company. These transactions are divided into three groups in the Merger and Division Communiqué of the Capital Markets Board (CMB).

According to this; “Merger: It means the merging of one of more than one company or a newly established company and the shareholders of the companies participating in the merger are given the right to be a shareholder in the partnership where the merger takes place according to a certain exchange rate, or cash equivalent to the value of the share.

Merger in the form of Acquisition: It means that at least one company is dissolved without liquidation by transferring its assets and liabilities as a whole to another company, the shares of the transferee company or the cash equivalent to the value of the share are given to the shareholders of the transferred company and the transferee company continues its legal personality.

Merger in the Form of New Establishment: It is the transfer of two or more companies to a new company to be established by dissolving their legal entities, combining their assets and liabilities as a whole, through dissolution without liquidation, and giving cash corresponding to the value of the newly established company in proportion to its partners.

Purpose and Benefits of Mergers and Acquisitions

• Synergy: After the merger, companies reach a higher value than they had. In simple terms, it can be defined as two plus two equals five. Synergy; This may occur through reduced average costs as a result of increased production due to economies of scale, and increased savings from combining production, sales and distribution networks. On the human resources side, synergy; It may result from the increase in productivity obtained from the combined use of talent and technology accumulation, and the increase in income resulting from access to new markets.
• Risk Diversification: Companies can merge with companies in other sectors to diversify their business areas and aim to spread their risks. The benefits of such mergers and acquisitions for corporate investors are questioned in the finance literature. Such mergers and acquisitions only benefit employees and managers, as investors’ own risk-spreading strategies are simpler and less costly. Philip Morris-Kraft, Amazon-WholeFoods, and Procter and Gamble-Gillette mergers can be given as examples of these mergers, which are also called hybrid mergers.
• Sources of financing: In order to benefit from the borrowing potential of a firm with a cheap financing source and low indebtedness structure, companies may choose to merge or take over with another company.
• Creating a monopoly or creating a competitive advantage: Two firms in the same market may merge in order to increase their bargaining power against their customers or not to compete. This is why most countries have anti-trust laws. In our country, mergers are checked by the Competition Authority to see if they have gained market power. The combination of two competing firms selling the same product is called horizontal merger. Exxon-Mobil and HP-Compaq mergers are examples of horizontal mergers.
• Vertical mergers: Mergers and acquisitions of companies operating in the same business area at different production stages of a product are called vertical mergers. Here, one firm is a customer of another firm. Vertical mergers are also made to increase efficiency. Examples of ebay-Paypal and Walt Disney-Pixar are vertical mergers.
• Merger and Acquisition (M&A) Process

Letter of Intent / Terms of Understanding / Transaction Framework Conditions

Contract/Contracts Negotiation and Signature

Interim Term

Legal Review and Reporting Process

Merger and Acquisition Closing

Our Activities in Mergers and Acquisitions

OKKE&Partners has managed the merger and acquisition processes of many multinational, local and foreign companies from start to finish. Our team provides consultancy services to clients operating in a wide variety of sectors. Our Law Firm also receives consultancy services from professors specialized in this field.

Some Services We Offer in Mergers and Acquisitions

– Management of the merger and acquisition process

– Creation of contracts for mergers and acquisitions

– Making the necessary notifications to the regulatory authorities in Turkey regarding mergers and acquisitions or making applications for the necessary permits

– Management of the process of making company type changes

– Preparation of partnership agreements

– Preparation of share transfer agreements

– Consulting and planning on joint ventures, mergers, acquisitions and asset sales

– Company audits

– Providing general legal advice to companies

– Taking decisions of the general assembly and the board of directors