Squeezing Out Minority Shareholders Under The New Turkish Commercial Code

One issue frequently raised in takeovers in Turkey is the possibility of a squeeze-out. The oft-repeated answer to this question will soon change, due to the enactment of the New Turkish Commercial Code (Law No. 6102 or the "New TCC") that will enter into force on 1 July 2012. The New TCC, in contrast to the Turkish Commercial Code (Law No. 6762) currently in force, introduces the squeeze-out procedure into Turkish law by entitling the controlling block to forcibly acquire shares held by a minority block.

Squeeze-Out by the Parent Company

Article 208 of the New TCC provides for granting the squeeze-out right to the shareholder who controls, directly or indirectly, at least 90% of the share capital and having at least 90% of the voting rights (i.e., the parent company)¹ in a joint stock corporation. Accordingly, the controlling shareholder is entitled to exercise its right through application to the relevant court, if the minority shareholder(s) acts in a manner