Corporate mergers in Turkish law problems and suggestions

The increase of profitability and productivity has gained more importance for companies aiming to sustain their position in international competition environment. Within this context, in order to keep pace with the increasing level of competition, the number of business restructurings has increased significantly both in local and in international markets. Business restructurings might be arranged in the form of mergers aiming to benefit from scale economies or in the form of divisions aiming to provide productivity increases in management and production activities and to adapt changing market conditions quickly. In addition to merger and division transactions, business restructurings in the form of exchange of shares and partial divisions have taken place in an increasing manner in recent years. Within the context of Turkey, the number of business restructurings has gradually increased as well thanks to the growing foreign capital investment in recent years. In parallel with EU regulations, the issue of business restructurings has been regulated in great detail both in Turkish Corporate Income Tax Law and in Turkish Commerce Law. The aim of this study is to examine the regulations regarding business restructurings such as mergers, divisions, exchange of shares and change of legal status within the context of Turkish Tax Laws, Turkish Commerce Law and EU Mergers Directive, to reveal similarities and differences between those regulations and to provide solutions for the actual and potential regulatory problems related to those transactions. This thesis defines the merger transaction firstly. It also tries to describe other forms of business restructurings such as division and exchange of shares both from a legal and from an economical perspective. The second chapter deals with EU Mergers Directive of EU Law - the meaning, the legal status, the enactment process and the applicability of that directive in EU Law. The third chapter discusses merger, division, exchange of shares and change of legal status transactions within the scope of Turkish Commerce Law. Finally, in the last chapter, those forms of business restructurings are handled within the context of Turkish Tax Laws in greater detail.