Mergers & Acquisitions
Nowadays, as in every field, globalization plays an important role at the corporations market. In this process while the companies are changing and modifying among themselves, they are also performing company mergers also known as “Company Marriage”. Mergers enable the companies to grow by sharing costs, capitals, access to market opportunities and business risks. According to Article 146/1 of TCL, it is defined as follows: “Merger is the establishment of a new commercial company by combination of two or more commercial companies or accession of one or more companies to another commercial company. If we are to describe merger in more detail:
“By legal means, a merger is the transfer of the assets of one or more commercial partnerships to one of the partnerships or to a newly incorporated partnership, without liquidation, either automatically or through full subrogation, and thereby merging their assets and automatic obtainment of partnership shares as the consideration of the assets past by the partners of the dissolved partnership in accordance with a calculated exchange rate.” There are two types of mergers by using the definition of merger. The first type is merger by way of new establishment and the second type is merger by way of transfer.
I. Merger by way of New Establishment: In this type of merger, the legal entities of both companies are dissolved and a new legal entity is established. In the context of Turkish Law for mergers by way of new establishment, there is a situation where two or more partnerships become a single partnership as a result of dissolution of at least two partnerships by transferring their assets and businesses as a whole including their assets and liabilities, without being subject to liquidation, to this single partnership so that their partners are included to a newly incorporated partnership. The merging parties are dissolved, but not liquidated.
II. Merger by way of Transfer: In this type of merger, there are two partnerships. One of the partnerships is referred as ‘the transferee partnership’ and the other is referred as ‘the transferor partnership.’ The transferee partnership continues to exist while the transferor partnership is included to the body of the transferee partnership by transferring its assets as a whole. The transferor partnership loses its legal identity once the proceedings are over; it is dissolved, yet not liquidated. Merger by way of transfer is worded in Turkish Law as ‘a situation where one partnership dissolves by transferring its assets and businesses including their assets and liabilities as a whole, without being subject to liquidation, to another partnership so that its partners are included to the partners of the latter.