Corporate and M&A

Contact: Leyla Orak; Erdem & Erdem (Turkey)

Introduction

The Turkish Commercial Code No. 6102[1] ("TCC") enables squeeze-out and exit rights of shareholders from joint stock companies in certain circumstances.

These rights are important in ensuring a balance of interest within the company. The legislative policy aims on the one hand to audit and control competition, and to control companies in a given market, but on the other hand encourages strong companies with a strong presence in the international arena (for example facilitated mergers and acquisition processes and tax incentives)[2]. The right to squeeze-out a minority with a material dissent of opinion also serves to establish a peaceful environment within a corporation and serves to establish a strong, concentrated company.

The TCC regulates the right to squeeze-out in company mergers and within group companies. Moreover, in the event the minority requests dissolution of a company for just cause, the TCC enables the courts to rule on squeezing out the claimant minority. One of the squeeze-out rights regulated under the TCC is specific to group companies. This newsletter article is in relation to the squeeze-out right regulated under Art. 208 granted to controlling companies.

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