The COVID-19 pandemic is affecting not only public health, but also global business operations and the economic sector. In light of reports that mergers and acquisitions are being delayed, it is important to determine the impact of COVID-19 on M&A transactions and implement measures to mitigate the risks associated therewith. To that end, this article addresses whether COVID-19 qualifies as force majeure or hardship for contractual purposes and its impact on parties' mutual obligations.
This article examines some of the key considerations for buyers and sellers when entering into an M&A transaction and how best to navigate deal-related risks. For example, in Turkey, M&A deals are generally not subject to regulatory approval. However, depending on the turnovers of the buyer, seller and target, a proposed transaction may be subject to Competition Board approval. Further, M&A deals in some regulated sectors (eg, energy and telecoms) must be approved by the governmental authorities.
A leveraged buyout (LBO) is a term used for a variety of transactions in which buyers (usually private equity firms) use leverage to acquire a company's shares. However, it is impossible to fully mitigate the risk that a target is deemed to provide financial assistance for the purchase of its own shares if the acquirer uses an LBO and the target provides guarantees or securities over its own assets due to a lack of established precedents. This uncertainty means that a diligent analysis is required for each transaction.
Squeeze-outs in Turkey are regulated under the Commercial Code where they concern private companies and the Capital Markets Law where they concern publicly held companies. This article examines the different processes for carrying out squeeze-outs at private and publicly held companies, as well as the squeeze-out rights available to controlling shareholders and the squeeze-out merger process.