Mergers and Acquisitions as a Method of Investment
As a result of few capital restrictions imposed upon businesses in Turkey, foreigners can easily make capital investments and either incorporate new companies or invest into already existing ones with %100 ownership through mergers and acquisitions (M&A).
Depending on the type of investment and the market, incorporation may not always be the choice, as it may prove difficult for new companies (and especially for foreigners who do not posses extensive knowledge of the local procedures and markets) to enter into markets already saturated with well-established competition. In such cases, acquiring an already established company through mergers and acquisitions may be the better choice and can be less costly and time consuming.
As ASY LEGAL we provide our services, with our experience in diverse fields of laws, to our national and international clients from broad range of industries to identify, analyze, manage, mitigate and resolve their legal risk in Mergers and Acquisitions transactions that meets their commercial goals.
We advise various different clients from different markets, with different fields of activity and in different sizes of investment. We have extensive knowledge and expertise to handle all aspects of a mergers & acquisitions transaction, including due diligence, contract review, negotiation and drafting, and execution of share transfers.
On a broader sense, Due Diligence means the assessment of a company by a prospective buyer through an investigation and analysis of the targeted company/business. Due Diligence is one of the key aspects of any M&A transaction, as this is the step where all legal and financial risk assessments are made. A comprehensive and thorough risk assessment will allow the prospective buyer/investor to make an informed decision whether to invest into the targeted company and can also provide insight regarding the actual value of the targeted company, thereby helping the investor to decide on the size of the investment.
It should be noted that Due Diligence is multi-layered process in any mergers and acquisitions transaction, as it requires the diligent review of legal and financial liabilities, as well as liabilities arising from the targeted company’s intellectual property. Accordingly, as ASY LEGAL, we provide three separate due diligence services, legal and IP due diligence provided by our own dedicated team, and financial due diligence via collaboration with our trusted partners (CPA). You can find detailed information on the importance of due diligence in M&A transactions in our published article here (also available via Mondaq).
Once the DD stage is completed, the next step in any mergers and acquisitions transaction is to draft, review and negotiate the contracts regarding the merger or the acquisition. There are usually numerous contracts and agreements, governing different aspects of the deal, which needs diligent review with expert knowledge of different fields. These contracts may include share transfer agreements, shareholder agreements, agreements relating to transfers and ownership of IP rights, contracts governing the transfer of debts, receivables and assets of the targeted company etc.
This can referred to as the final execution stage of a mergers and acquisition transaction, as it involves the actual transfer and handover of the targeted company shares to the prospective buyer, the finalize the handover.
This is crucial, as the rules and procedures governing share transfers are quite complex in Turkey, and different approaches and procedures may be required depending on the company type and also the business of the targeted company (companies in certain sectors may be imposed with additional rules and procedures for share transfers by the law). For a detailed breakdown of possible issues in share transfer procedures, please refer to our share transfers section or to our published articles here (also available via Mondaq).
In light of the above, ASY LEGAL team is highly experienced and capable of handling all sizes of mergers and acquisitions transactions, with our diverse practice enabling us to provide a full service package to our clients to ensure a smooth execution of any mergers and acquisitions transaction.