Introduction
This article considers with the mechanisms for merging local
entities under the new provisions of the Turkish Commercial Code
("TCC"). This is not a review from a Competition Law
perspective rather consideration of the basic steps required to
merge two local entities under the TCC.
I. Legal Framework for the Merger
There are two types of mergers envisaged by TCC,
(a) Firstly where either entity is completely absorbed by the
other entity ("Absorption") or
(b) where entities lose their separate identities and unite to
form a completely new entity
("Consolidation").
In Absorption, the "absorbed" company loses its
identity and becomes part of the "absorbing" entity,
which retains its identity and survives the merger. Thus, the
"absorbing" entity assumes all the rights, privileges,
and liabilities of the merged entity. In Consolidation, the merged
entities become shareholders in the new entity under which they
have become united.
