Share Purchase Agreements in Turkey: Due Diligence, Warranties, Indemnities and Closing Conditions

 

Introduction

A share purchase transaction allows a buyer to acquire some or all of the shares in a Turkish company.

Unlike an asset purchase, the target company generally continues to exist with the same:

• Legal personality,
• Contracts,
• Employees,
• Assets,
• Licences,
• Receivables,
• Debts,
• Tax history,
• Litigation exposure.

Only the ownership of the company changes.

This continuity is commercially useful because the business may continue without transferring every contract and asset separately. It also creates a major legal risk: the buyer acquires the company together with liabilities arising before completion, including liabilities that may not appear clearly in the financial statements.

The buyer must therefore investigate the target before signing and use the share purchase agreement to allocate the risks identified during that investigation.

The principal stages of a Turkish share acquisition generally include:

1. Confidentiality agreement,
2. Term sheet or letter of intent,
3. Legal, financial, tax and commercial due diligence,
4. Negotiation of the share purchase agreement,
5. Signing,
6. Satisfaction of conditions precedent,
7. Closing,
8. Post-closing adjustments and claims.

Mergers and acquisitions in Turkey are principally affected by the Turkish Commercial Code, Turkish Code of Obligations, competition legislation, employment law and, depending on the target, capital-markets and sector-specific legislation. Regulatory permission may be required from authorities such as the Competition Authority, Energy Market Regulatory Authority, Banking Regulation and Supervision Agency or Capital Markets Board.

A share purchase agreement should therefore be drafted as both:

• A transfer document, and
• A risk-allocation mechanism.

Share Purchase or Asset Purchase?

Before preparing the agreement, the parties should determine whether the buyer will acquire:

• Shares in the company, or
• Selected assets and business operations.

Share Purchase

In a share purchase:

• The buyer acquires the target company’s shares.
• The target remains the owner of its assets.
• Existing debts and liabilities remain with the target.
• Contracts ordinarily remain in the target’s name, subject to change-of-control provisions.
• Employees continue to be employed by the same company.
• Licences remain with the target, subject to regulatory rules.

The buyer therefore becomes indirectly exposed to the target’s past and future liabilities through ownership of the company.

Asset Purchase

In an asset purchase, the buyer selects specific assets or parts of the business, such as:

• Machinery,
• Inventory,
• Intellectual property,
• Customer contracts,
• Real estate,
• Employees,
• Business name.

An asset purchase may allow the buyer to exclude certain liabilities. However, separate transfer formalities, third-party consents and statutory succession rules may apply.

A share purchase is not automatically safer or easier than an asset purchase. The proper structure depends on:

• Tax consequences,
• Licences,
• Contracts,
• Employees,
• Financing,
• Liability profile,
• Regulatory approvals,
• Exit strategy.

Foreign Buyers

Foreign investors may generally establish Turkish companies or acquire shares in Turkish companies under the same basic treatment applicable to domestic investors. Joint stock and limited liability companies are the principal corporate forms used for foreign investment.

A foreign buyer does not ordinarily need a Turkish partner merely to acquire shares.

However, special rules may apply where the target operates in a regulated sector such as:

• Banking,
• Insurance,
• Payment services,
• Energy,
• Broadcasting,
• Telecommunications,
• Civil aviation,
• Defence,
• Mining.

The buyer should also investigate whether the target owns Turkish real estate subject to foreign-capital company restrictions or notification requirements.

The Term Sheet

A term sheet records the principal commercial understanding before the full SPA is negotiated.

It may address:

• Shares to be acquired,
• Indicative purchase price,
• Payment structure,
• Due diligence,
• Exclusivity,
• Confidentiality,
• Financing,
• Regulatory approvals,
• Expected signing and closing dates.

Most term-sheet provisions are commonly intended to be non-binding, except for specified clauses such as:

• Confidentiality,
• Exclusivity,
• Costs,
• Governing law,
• Dispute resolution.

The document should state clearly which provisions are binding.

A vague statement that the entire term sheet is “subject to contract” may create uncertainty where the parties intend the confidentiality and exclusivity obligations to be immediately enforceable.

Exclusivity and No-Shop Clauses

The buyer may require the seller and target not to negotiate with other potential purchasers during due diligence and SPA negotiations.

The clause should define:

• Exclusivity period,
• Persons covered,
• Prohibited communications,
• Treatment of unsolicited offers,
• Required disclosure,
• Consequences of breach.

Turkish M&A guidance recognises that parties may agree on no-shop or exclusivity provisions and may support those obligations through contractual remedies.

The exclusivity period should be long enough for due diligence and regulatory analysis but should not prevent the seller from seeking alternatives indefinitely.

Confidentiality

The buyer will receive commercially sensitive information about:

• Customers,
• Prices,
• Employees,
• Technology,
• Suppliers,
• Financial results,
• Strategy.

The confidentiality agreement should regulate:

• Permitted recipients,
• Use solely for transaction evaluation,
• Data-room access,
• Return or destruction,
• Required legal disclosures,
• Duration,
• Consequences if the transaction does not proceed.

Where the buyer competes with the target, sensitive data should be handled carefully. Detailed customer-level pricing, future strategy and competitively sensitive information may need to be disclosed through clean teams or restricted-access processes.

What Is Legal Due Diligence?

Legal due diligence is the systematic examination of the target company’s legal position before the acquisition.

The investigation is intended to determine:

• What the target owns,
• What it owes,
• Which legal risks exist,
• Whether the seller’s statements are accurate,
• Whether the transaction can close lawfully,
• Which protections should appear in the SPA.

Official Turkish investment guidance identifies detailed legal and financial due diligence as an important part of a successful acquisition.

Due diligence does not guarantee that every hidden problem will be discovered.

Its purpose is to reduce uncertainty and permit informed decisions concerning:

• Price,
• Transaction structure,
• Conditions precedent,
• Warranties,
• Indemnities,
• Retention or escrow,
• Whether the buyer should proceed at all.

Corporate Due Diligence

The corporate review should examine:

• Articles of association,
• Trade registry records,
• Shareholders,
• Share ledger,
• Share certificates,
• Capital payments,
• Privileged shares,
• Board and general assembly resolutions,
• Signing authority,
• Share pledges,
• Options and conversion rights.

The buyer should confirm that the seller legally owns the shares and may transfer them without:

• Third-party consent,
• Pre-emption right,
• Shareholders agreement restriction,
• Pledge,
• Attachment,
• Court order.

A person appearing commercially to be the owner may not be the registered or legally recognised shareholder.

Beneficial Ownership

The buyer should identify the natural persons who ultimately own or control the seller and target.

Beneficial ownership review is relevant to:

• Anti-money-laundering compliance,
• Sanctions,
• Conflicts of interest,
• Related-party transactions,
• Source of funds,
• Regulatory approvals.

The SPA may require the seller to warrant that the disclosed ownership structure is accurate and that no undisclosed nominee or trust arrangement exists.

Financial and Tax Due Diligence

Financial and tax advisers should examine matters such as:

• Financial statements,
• Debt,
• Cash,
• Working capital,
• Receivables,
• Inventory,
• Off-balance-sheet liabilities,
• Tax returns,
• Tax inspections,
• Related-party transactions,
• Transfer pricing,
• VAT,
• Withholding,
• Customs.

A tax liability relating to a period before closing may be assessed after the buyer has acquired the company.

The SPA should therefore distinguish between:

• General warranties concerning tax compliance,
• Specific indemnities for identified tax risks,
• Responsibility for pre-closing and post-closing tax periods,
• Control of tax audits.

Material Contracts

The buyer should review contracts that are important to the business, including:

• Customer contracts,
• Supplier contracts,
• Distribution agreements,
• Franchise agreements,
• Loan and security documents,
• Leases,
• Technology licences,
• Joint venture agreements,
• Government contracts.

The review should identify:

• Term,
• Termination rights,
• Change-of-control provisions,
• Exclusivity,
• Minimum purchase commitments,
• Assignment restrictions,
• Defaults,
• Unusual liabilities.

A share transfer does not change the legal identity of the target. Nevertheless, a contract may allow the other party to terminate or require consent following a direct or indirect change of control.

Necessary third-party consents should be listed as closing conditions where the relevant contract is material.

Financing and Security

The target’s financing documents should be reviewed for:

• Outstanding loans,
• Shareholder loans,
• Mortgages,
• Share pledges,
• Bank account pledges,
• Receivable assignments,
• Financial covenants,
• Change-of-control clauses,
• Early repayment.

A buyer may discover that the company’s principal assets are already pledged to lenders.

The SPA should determine whether existing financing will:

• Continue,
• Be refinanced,
• Be repaid at closing,
• Be released before closing.

Where debt will be repaid at closing, the parties should prepare:

• Payoff letters,
• Release documents,
• Funds-flow statement,
• Simultaneous payment and discharge arrangements.

Employment Due Diligence

Employment review should cover:

• Employee list,
• Employment contracts,
• Salaries and benefits,
• Senior management arrangements,
• Overtime,
• Annual leave,
• Severance exposure,
• Workplace disputes,
• Independent contractors,
• Foreign employee permits,
• Social-security compliance.

Because the target remains the same employer in a share acquisition, employees ordinarily continue in the same legal entity.

However, the transaction may trigger:

• Change-of-control bonuses,
• Executive termination rights,
• Retention needs,
• Management replacement,
• Works council or union issues,
• Regulatory fit-and-proper assessments.

The buyer should calculate not only current payroll but also accrued employee liabilities.

Litigation and Enforcement

The buyer should review:

• Pending lawsuits,
• Arbitration,
• Administrative proceedings,
• Criminal investigations involving the company,
• Enforcement files,
• Tax litigation,
• Consumer claims,
• Product liability,
• Employment disputes.

The review should also identify threatened claims that have not yet become formal proceedings.

A specific known dispute should ordinarily be addressed through a specific indemnity rather than left only under a broad litigation warranty.

Intellectual Property

The target’s business may depend on:

• Trademarks,
• Patents,
• Software,
• Designs,
• Domain names,
• Know-how,
• Copyright,
• Data.

The review should confirm:

• Registered owner,
• Registration status,
• Renewal,
• Licences,
• Employee and contractor assignments,
• Infringement claims,
• Open-source software risks,
• Limitations following change of control.

A target using a founder’s trademark or software under an informal permission may lose a core business asset after the acquisition.

The SPA may require ownership or long-term licence arrangements to be completed before closing.

Data Protection and Cybersecurity

The buyer should investigate:

• Personal-data processing,
• Privacy notices,
• Consent records,
• International data transfers,
• Processor agreements,
• Security measures,
• Data breaches,
• Regulatory complaints,
• Customer databases.

A transaction involving a technology, healthcare, e-commerce or consumer business may carry significant data-related exposure.

The seller may be required to provide specific warranties concerning:

• Lawful data collection,
• Absence of undisclosed breaches,
• Adequate security,
• Compliance with regulator decisions.

Environmental and Regulatory Matters

Where the target owns factories, land or regulated facilities, due diligence should cover:

• Environmental permits,
• Waste management,
• Contamination,
• Emissions,
• Occupational safety,
• Operating licences,
• Product registrations,
• Regulatory inspections.

The legal owner of contaminated land may face substantial remediation exposure even where the environmental damage occurred before the acquisition.

Specific environmental risks should be addressed through:

• Remediation before closing,
• Purchase-price reduction,
• Escrow,
• Specific indemnity,
• Insurance.

Real Estate

The buyer should review each property used by the target.

For owned property:

• Title,
• Mortgages,
• Attachments,
• Easements,
• Zoning,
• Building permits,
• Occupancy permit,
• Environmental status.

For leased property:

• Lease term,
• Rent increases,
• Renewal,
• Change of control,
• Termination,
• Sublease,
• Deposit.

The buyer should confirm that the target’s essential factory, office or store cannot be lost shortly after closing.

Compliance Review

Compliance due diligence may include:

• Anti-bribery,
• Sanctions,
• Export controls,
• Competition law,
• Public procurement,
• Customs,
• Money laundering,
• Whistleblowing,
• Internal investigations.

A seller warranty that the company “has complied with all laws” may be too broad to replace focused investigation in a high-risk sector.

Identified compliance risks may justify:

• Independent investigation,
• Disclosure to authorities,
• Condition precedent,
• Specific indemnity,
• Refusal to proceed.

Due Diligence Red Flags

Common red flags include:

• Unpaid share capital,
• Missing share certificates,
• Undisclosed shareholder agreement,
• Share pledge,
• Informal related-party payments,
• Unlicensed software,
• Founder-owned trademark,
• Missing operating licence,
• Tax inspection,
• Customer concentration,
• Expiring lease,
• Major contract change-of-control right,
• Unregistered employees,
• Related-party debt,
• Environmental contamination,
• Ongoing criminal investigation.

A red flag does not always require the transaction to end.

It may instead lead to:

• Price reduction,
• Pre-closing remedy,
• Specific indemnity,
• Escrow,
• Deferred payment,
• Alternative transaction structure.

Disclosure Letter

The seller commonly qualifies the warranties through a disclosure letter.

For example, the seller may warrant that there is no litigation except as disclosed in the disclosure letter.

The disclosure process should be organised carefully.

A disclosure should be:

• Specific,
• Clear,
• Supported by documents,
• Sufficient to identify the nature and scope of the risk.

A broad statement that “all matters in the data room are disclosed” may create disputes over whether the buyer was given adequate notice of a particular exception.

The agreement should state whether disclosure includes:

• Disclosure letter only,
• Entire virtual data room,
• Public registers,
• Matters actually known to the buyer.

Purchase Price

The SPA should state:

• Total consideration,
• Currency,
• Payment date,
• Bank account,
• Withholding and transaction costs,
• Deferred consideration,
• Earn-out,
• Escrow or retention,
• Price-adjustment mechanism.

The commercial purchase price may not equal the final amount paid at closing.

Adjustments may be made for:

• Cash,
• Debt,
• Working capital,
• Leakage,
• Transaction expenses,
• Intercompany balances.

Completion Accounts

Under a completion-accounts mechanism, the preliminary price is adjusted after closing using financial statements prepared as of the closing date.

The agreement should define:

• Accounting principles,
• Cash,
• Debt,
• Working capital,
• Preparation timetable,
• Review procedure,
• Expert determination,
• Payment of adjustment.

The definitions should be detailed enough to prevent the parties from changing accounting practices after signing.

A dispute over whether an item is “debt” or “working capital” may substantially alter the final price.

Locked-Box Mechanism

Under a locked-box structure, the price is based on historical accounts at a specified date.

The seller promises that value has not been transferred from the target to the seller or related persons after that date, except for expressly permitted leakage.

Leakage may include:

• Dividends,
• Management fees,
• Related-party payments,
• Waiver of receivables,
• Asset transfers below value,
• Transaction bonuses paid for the seller.

The agreement should define:

• Prohibited leakage,
• Permitted leakage,
• Notification,
• Repayment,
• Interest,
• Claim period.

The buyer receives price certainty but relies more heavily on historical accounts and anti-leakage protections.

Earn-Out

An earn-out makes part of the price dependent on the target’s future performance.

Performance may be based on:

• Revenue,
• EBITDA,
• Customer retention,
• Regulatory approval,
• Product launch,
• Number of users.

The agreement should regulate:

• Measurement period,
• Accounting policy,
• Business-operation obligations,
• Buyer’s management freedom,
• Related-party transactions,
• Access to records,
• Dispute resolution.

Without operational covenants, the buyer may alter the business in a manner that reduces the earn-out.

Conversely, excessive restrictions may prevent the buyer from managing the acquired company effectively.

Warranties

Warranties are contractual statements concerning the target, shares, seller or business.

Typical warranties concern:

• Seller’s ownership and authority,
• Valid issue of shares,
• Financial statements,
• Tax,
• Contracts,
• Employees,
• Litigation,
• Intellectual property,
• Compliance,
• Assets,
• Insurance,
• Data protection,
• Insolvency.

The purpose of warranties is to:

• Obtain information,
• Allocate risk,
• Support a damages claim if the statement is inaccurate.

The SPA should define the legal remedy rather than assuming that the terminology used in an international template will automatically create the same result under Turkish law as it would under English or United States law.

Fundamental Warranties

Fundamental warranties generally concern the legal foundation of the transaction, such as:

• Seller owns the shares,
• Shares are free of encumbrances,
• Seller has authority,
• Agreement is binding,
• Target is validly incorporated.

These warranties commonly receive:

• Higher liability cap,
• Longer claim period,
• Fewer knowledge qualifications.

A buyer who does not obtain reliable title to the shares has not received the central benefit of the SPA.

Business Warranties

Business warranties cover the target’s operations.

They may concern:

• Financial information,
• Contracts,
• Employees,
• Tax,
• Regulatory compliance,
• Assets,
• Intellectual property.

Business warranties are usually subject to negotiated limitations such as:

• Disclosure,
• Time limits,
• Financial thresholds,
• Liability cap,
• Seller knowledge.

Knowledge Qualifications

A seller may agree to a warranty only “so far as the seller is aware.”

The agreement should define whose knowledge counts.

Possible knowledge persons include:

• Seller,
• Directors,
• Chief executive,
• Chief financial officer,
• Legal manager,
• Human resources manager.

The agreement should state whether knowledge means:

• Actual knowledge only,
• Knowledge after reasonable enquiry.

An undefined knowledge qualification may allow the seller to avoid responsibility by not asking obvious questions.

Indemnities

An indemnity is a contractual obligation to compensate the buyer or target for a specified loss or liability.

Indemnities are commonly used for identified risks such as:

• Pending tax audit,
• Existing litigation,
• Environmental contamination,
• Unpaid employee claims,
• Regulatory investigation,
• Related-party debt,
• Product recall.

A specific indemnity should define:

• Trigger,
• Beneficiary,
• Recoverable loss,
• Defence control,
• Payment timing,
• Tax treatment,
• Duration,
• Cap.

The buyer should avoid relying solely on a general warranty for a liability already known and likely to arise.

Warranty and Indemnity Difference

The contractual consequences should be stated expressly.

A warranty claim may require proof that:

• Statement was inaccurate,
• Breach caused loss,
• Loss is recoverable.

A specific indemnity may be drafted to require payment upon occurrence of the defined liability, subject to the agreed wording.

The agreement should not use the words “warranty,” “representation,” “undertaking” and “indemnity” interchangeably without defining their intended legal effect.

Seller Liability Limitations

The seller will commonly request limitations including:

• De minimis threshold,
• Claims basket,
• Overall cap,
• Time limits,
• Exclusion of indirect loss,
• No double recovery,
• Mitigation,
• Insurance recovery,
• Tax benefit credit,
• Buyer knowledge.

The parties should agree separate rules for:

• Fundamental warranties,
• Tax warranties,
• Business warranties,
• Specific indemnities,
• Fraud or deliberate concealment.

De Minimis and Basket

A de minimis threshold excludes individual claims below a specified amount.

A basket requires total qualifying claims to exceed an agreed threshold before recovery.

The basket may be:

• Deductible basket: buyer recovers only the excess,
• Tipping basket: buyer recovers the entire amount once the threshold is exceeded.

The SPA should state the mechanism clearly.

Liability Cap

The seller’s maximum liability may be stated as:

• Percentage of purchase price,
• Full purchase price,
• Different caps for different claim categories.

For example:

• General warranties: lower percentage,
• Tax: higher percentage,
• Title to shares: full purchase price,
• Specific indemnity: separately negotiated amount.

A cap should not be assumed to protect fraud or intentional concealment without careful legal analysis.

Claim Periods

The SPA should establish deadlines for notifying claims.

Different periods may apply to:

• General warranties,
• Tax,
• Employment,
• Environmental matters,
• Fundamental warranties,
• Specific indemnities.

The buyer should not merely notify that “a claim may exist.”

The notice requirements may require:

• Nature of claim,
• Estimated amount,
• Supporting facts,
• Relevant warranty,
• Third-party proceeding.

The agreement should also state whether notification alone preserves the claim or whether court or arbitration proceedings must begin within a further period.

Third-Party Claims

A warranty or indemnity claim may arise because a third party sues the target or an authority starts an investigation.

The SPA should regulate:

• Prompt notice,
• Control of defence,
• Appointment of lawyers,
• Settlement consent,
• Cooperation,
• Costs,
• Information.

The seller should not control the defence where the matter may damage the target’s future business or regulatory relationship.

The buyer should not settle unreasonably and then demand full reimbursement without allowing the seller to participate.

Escrow and Retention

Part of the purchase price may be:

• Held in escrow,
• Retained by the buyer,
• Paid into a blocked account.

The amount may secure:

• Warranty claims,
• Tax indemnities,
• Purchase-price adjustment,
• Completion obligations.

The escrow agreement should regulate:

• Account bank,
• Release dates,
• Claims,
• Disputed amounts,
• Interest,
• Bank charges,
• Governing law.

Escrow provides practical payment security but does not replace carefully drafted liability provisions.

Warranty and Indemnity Insurance

Warranty and indemnity insurance may cover specified warranty claims.

The policy should be reviewed for:

• Exclusions,
• Retention,
• Coverage period,
• Known risks,
• Due diligence requirements,
• Subrogation.

Known issues are frequently excluded and may still require seller indemnities or price adjustments.

The SPA and insurance policy should be drafted together to avoid a coverage gap.

Signing and Closing

Signing and closing may occur:

• On the same day, or
• On different dates.

Simultaneous signing and closing may be possible where:

• No regulatory approval is required,
• Financing is ready,
• Transfer documents are available,
• Third-party consents are complete.

A split signing and closing is common where the parties need time to satisfy conditions precedent.

Conditions Precedent

Conditions precedent are requirements that must be satisfied or waived before closing.

Typical conditions include:

• Competition clearance,
• Sector approval,
• Third-party consent,
• Financing,
• Release of share pledges,
• Corporate resolutions,
• Regulatory licence,
• Completion of restructuring,
• Repayment of related-party balances,
• No injunction.

The agreement should state:

• Which party is responsible,
• Required effort standard,
• Evidence of satisfaction,
• Waiver rights,
• Long-stop date,
• Consequence of failure.

A party should not be permitted to rely on failure of a condition that it deliberately prevented from being satisfied.

Competition Authority Approval

A share acquisition may require prior approval where it creates a lasting change of control and the applicable turnover thresholds are exceeded.

Turkey updated the merger-control thresholds on 11 February 2026. The individual Turkish turnover threshold increased to TRY 1 billion, the aggregate Turkish turnover threshold to TRY 3 billion, and the worldwide threshold to TRY 9 billion.

The assessment is based on the transaction parties and their economic groups, not merely the purchase price.

A minority share acquisition can be notifiable if it gives the buyer:

• Sole control,
• Joint control,
• Strategic veto rights.

An acquisition requiring approval should not be implemented before clearance.

The SPA should prohibit premature control over the target while approval is pending.

Gun-Jumping

Before closing, the seller remains responsible for operating the target.

The buyer may receive consent rights over extraordinary actions to protect the value of the business. However, the buyer should not take operational control before competition approval and closing.

High-risk conduct may include:

• Directing prices,
• Controlling customer negotiations,
• Appointing managers prematurely,
• Integrating commercial teams,
• Exchanging unnecessary competitively sensitive information.

Pre-closing covenants should protect the transaction without transferring control early.

Technology Transactions

The current 2026 merger-control framework revised the treatment of technology undertakings and limited the special technology rule to qualifying undertakings established in Turkey. The updated rules also require the relevant individual turnover threshold under the revised framework.

Buyers acquiring Turkish technology businesses should not assume that a low-revenue start-up is automatically outside merger review.

The target’s activity, Turkish establishment and applicable group turnovers should be examined under the current communiqué and guidelines.

Sector Approvals

A share transfer may require consent from a regulator where the target operates in sectors such as:

• Banking,
• Insurance,
• Energy,
• Capital markets,
• Telecommunications,
• Aviation.

Official Turkish investment guidance confirms that sector-specific permissions may be required in addition to ordinary corporate and competition procedures.

The SPA should identify whether approval is:

• Required before signing,
• Required before closing,
• Triggered by a particular ownership percentage,
• Subject to fit-and-proper review.

Material Adverse Change

A material adverse change clause may allow the buyer to refuse closing if a serious event occurs between signing and closing.

The clause should define:

• Materiality,
• Duration,
• Financial effect,
• Business effect,
• Exclusions.

Common exclusions may include:

• General economic conditions,
• Industry-wide changes,
• Exchange-rate movements,
• Changes in law,
• Events affecting the target disproportionately.

A vague MAC clause may create uncertainty and litigation.

It should not permit the buyer to withdraw merely because the transaction has become less attractive.

Pre-Closing Covenants

The seller may promise to operate the target in the ordinary course between signing and closing.

Actions requiring buyer consent may include:

• Issuing shares,
• Borrowing,
• Selling material assets,
• Paying extraordinary dividends,
• Entering major contracts,
• Terminating key employees,
• Settling major litigation,
• Changing accounting policy.

Consent rights should include:

• Clear thresholds,
• Prompt response periods,
• Emergency exceptions,
• Competition-law safeguards.

Long-Stop Date

The long-stop date is the deadline by which conditions precedent must be satisfied.

If closing has not occurred by that date, one or both parties may terminate.

The agreement should state whether the long-stop date may be extended where:

• Regulatory review continues,
• Conditions are nearly complete,
• Delay is caused by one party,
• Remedy negotiations are ongoing.

A party responsible for the failure should not automatically receive the same termination rights as the innocent party.

Closing Deliverables

The closing checklist should identify every document and action required.

Seller deliverables may include:

• Share-transfer documents,
• Original share certificates,
• Board and general assembly resolutions,
• Share ledger update,
• Manager resignations,
• Release of pledges,
• Corporate books,
• Records and passwords,
• Payoff letters,
• Tax documents.

Buyer deliverables may include:

• Purchase-price payment,
• Corporate approvals,
• Power of attorney,
• Financing documents,
• New board nominations.

Closing should not rely on an informal exchange of documents without a written completion agenda.

Joint Stock Company Share Transfers

The mechanics depend on matters such as:

• Registered or bearer shares,
• Whether certificates have been issued,
• Restrictions in the articles,
• Shareholder approvals,
• Regulatory requirements.

For certificated registered shares, endorsement and delivery may be required, together with recognition and registration in the share ledger where applicable. Ordinary joint stock company share transfers are not generally registered with the trade registry merely because the shareholder changes, although special circumstances and public or regulated companies may require additional procedures.

The buyer should confirm that:

• Seller appears as shareholder,
• Certificates are genuine,
• Transfer chain is complete,
• Share ledger is updated,
• Necessary company approval has been obtained.

Limited Company Share Transfers

A Turkish limited company share transfer generally requires:

• Written transfer agreement,
• Notarised signatures,
• General assembly approval unless the articles provide otherwise,
• Registration and announcement procedures.

The Ministry of Trade’s current company guidance confirms that limited company share transfers are subject to general assembly approval under the ordinary statutory structure.

The SPA may be signed before the notarised statutory transfer agreement. However, the closing structure should make clear when:

• Contractual sale obligation arises,
• Statutory transfer becomes effective,
• Approval is obtained,
• Purchase price is released.

Share Ledger and Corporate Books

The buyer should ensure that the target’s:

• Share ledger,
• General assembly records,
• Board or managers’ resolutions,
• Beneficial ownership records

are updated after closing.

Where the company is subject to the Electronic Commercial Ledger System, the closing process should also account for the applicable electronic-record procedures. The Ministry of Trade announced mandatory electronic commercial books for companies newly registered from 1 January 2026, including share and general assembly records.

Payment Mechanics

The closing funds-flow document should show:

• Purchase price,
• Debt repayment,
• Escrow,
• Retention,
• Transaction costs,
• Shareholder loan repayment,
• Bank accounts,
• Payment order.

Where shares are pledged, payment may need to be coordinated with:

• Lender repayment,
• Pledge release,
• Share delivery,
• Registration.

The buyer should not transfer the entire price without receiving the agreed title and release documents simultaneously.

Closing Confirmation

The parties may sign a closing memorandum confirming that:

• Conditions have been satisfied,
• Deliverables have been exchanged,
• Shares have transferred,
• Price has been paid,
• Closing occurred at a specified time.

This document can help determine:

• Risk transfer,
• Economic ownership,
• Control,
• Start of post-closing periods,
• Warranty claim deadlines.

Post-Closing Actions

Post-closing obligations may include:

• Trade registry filings,
• Regulator notifications,
• Bank mandate changes,
• Licence updates,
• Tax notifications,
• Beneficial ownership updates,
• Employee communication,
• Integration planning,
• Release of escrow.

The SPA should assign responsibility and deadlines for each action.

Restrictive Covenants

The seller may agree not to:

• Compete with the target,
• Solicit customers,
• Hire key employees,
• Use confidential information.

The restrictions should be proportionate in:

• Duration,
• Territory,
• Business scope,
• Persons covered.

A restriction should protect the goodwill purchased by the buyer without preventing the seller from carrying on unrelated business.

Competition-law analysis may be required, particularly where the seller and buyer remain active in neighbouring markets.

Seller Transitional Support

The business may depend on the seller for:

• IT systems,
• Premises,
• Employees,
• Accounting,
• Procurement,
• Licences,
• Brands.

A transitional services agreement may be required.

It should regulate:

• Services,
• Duration,
• Charges,
• Service standards,
• Data access,
• Exit assistance.

The buyer should avoid acquiring a legally separate company that cannot operate independently on the day after closing.

Management and Employees

The buyer should decide whether key managers will:

• Remain,
• Resign at closing,
• Sign new contracts,
• Receive retention bonuses,
• Roll over equity.

The SPA should coordinate with:

• Employment agreements,
• Non-compete terms,
• Bonus plans,
• Severance,
• Director releases.

A director resignation should not automatically release that person from liability arising from earlier conduct unless the relevant legal and contractual requirements are satisfied.

Post-Closing Price Claims

Completion-account or earn-out disputes commonly concern:

• Accounting policies,
• Debt classification,
• Working capital,
• Exceptional costs,
• Related-party transactions,
• Revenue recognition.

The SPA may refer these accounting disputes to an independent accountant acting as an expert.

The expert clause should state:

• Scope,
• Procedure,
• Documents,
• Fees,
• Binding effect,
• Treatment of legal questions.

Legal disputes concerning contractual interpretation should ordinarily remain with the court or arbitral tribunal unless the agreement clearly provides otherwise.

Dispute Resolution

The SPA should state:

• Governing law,
• Court jurisdiction or arbitration,
• Seat,
• Language,
• Number of arbitrators.

International acquisitions frequently use arbitration because of:

• Confidentiality,
• Cross-border enforcement,
• Complex contractual claims,
• Foreign-language proceedings.

Certain corporate, registry and regulatory matters may still require Turkish court or administrative procedures.

The dispute clause should also coordinate with expert determination for accounting adjustments.

Mandatory Commercial Mediation

Where the SPA provides for Turkish court litigation, qualifying monetary and compensation claims may require mandatory commercial mediation before a lawsuit.

Possible claims include:

• Unpaid purchase price,
• Warranty damages,
• Indemnity,
• Escrow release,
• Earn-out.

The parties should not assume that a contractual negotiation period replaces statutory mediation.

Buyer Due Diligence Checklist

The buyer should review:

1. Corporate existence and authority.
2. Share ownership.
3. Share certificates and ledger.
4. Capital payments.
5. Share pledges and options.
6. Financial statements.
7. Tax.
8. Debt and security.
9. Material contracts.
10. Change-of-control provisions.
11. Employees.
12. Litigation.
13. Intellectual property.
14. Data protection.
15. Real estate.
16. Environmental risks.
17. Regulatory licences.
18. Competition compliance.
19. Related-party transactions.
20. Insurance.

SPA Drafting Checklist

The SPA should address:

1. Parties.
2. Shares sold.
3. Purchase price.
4. Price adjustment.
5. Earn-out.
6. Signing.
7. Conditions precedent.
8. Regulatory approvals.
9. Pre-closing covenants.
10. Closing deliverables.
11. Warranties.
12. Disclosure.
13. Specific indemnities.
14. Liability caps.
15. Claim thresholds.
16. Claim periods.
17. Third-party claims.
18. Escrow or retention.
19. Restrictive covenants.
20. Confidentiality.
21. Post-closing obligations.
22. Governing law.
23. Dispute resolution.

Frequently Asked Questions

What is a share purchase agreement?

It is a contract under which a seller agrees to transfer shares in a company to a buyer for an agreed price.

Does the buyer acquire the company’s liabilities?

The liabilities remain legally with the target company. However, the buyer acquires ownership of that company and therefore bears their economic effect.

Is due diligence mandatory?

It is not a substitute for the SPA, but legal and financial due diligence is an essential risk-management step in most acquisitions. Official investment guidance also recommends detailed evaluation of the target before acquisition.

Can a foreign company acquire 100% of a Turkish company?

Generally yes, subject to sector-specific and regulatory restrictions.

Is a Turkish partner required?

Not generally.

Is a term sheet binding?

It depends on its wording. Confidentiality, exclusivity, costs and dispute provisions may be binding even where the commercial acquisition terms remain non-binding.

What is the difference between signing and closing?

Signing creates the contractual transaction framework. Closing is the stage when the shares, payment and agreed deliverables are exchanged.

Can signing and closing happen on the same day?

Yes, where no outstanding approvals, conditions or transfer preparations remain.

What are conditions precedent?

They are requirements that must be satisfied or waived before closing.

Is Competition Authority approval always required?

No. It is required where the transaction creates a relevant lasting change of control and the applicable turnover thresholds are exceeded.

What are the 2026 thresholds?

The current framework uses updated figures including TRY 1 billion as the individual Turkish turnover threshold, TRY 3 billion as the aggregate Turkish turnover threshold and TRY 9 billion as the worldwide turnover threshold within the applicable alternative tests.

Can a minority share purchase require approval?

Yes, if the rights acquired give the buyer sole or joint control.

Can the buyer control the target before approval?

The parties should avoid premature implementation or operational control before required clearance and closing.

What is a warranty?

It is a contractual statement about the shares, seller, target or business.

What is an indemnity?

It is a contractual promise to compensate for a specified liability or loss.

Should known risks be covered by a warranty?

A known and specific risk is commonly addressed through a specific indemnity, price reduction, escrow or pre-closing remedy.

What is a disclosure letter?

It lists exceptions to the seller’s warranties and provides supporting information.

What is a locked-box price?

It is a fixed-price mechanism based on historical accounts, protected by anti-leakage provisions.

What are completion accounts?

They are closing-date accounts used to adjust the preliminary purchase price after closing.

What is an earn-out?

It is deferred consideration calculated by reference to the target’s post-closing performance or milestones.

What is a liability cap?

It is the maximum amount the seller must pay for specified SPA claims.

Can different claims have different caps?

Yes. Title, tax, general warranties and specific indemnities may have separate limits.

What is an escrow?

It is an arrangement under which part of the purchase price is held by an independent account provider pending release conditions.

How are joint stock company shares transferred?

The procedure depends on the share type, certificates and articles. Certificated registered shares commonly require endorsement, delivery and share-ledger recognition.

How are limited company shares transferred?

The transaction generally requires a written agreement with notarised signatures and general assembly approval unless the articles provide otherwise.

Must a joint stock company shareholder change be registered with the trade registry?

An ordinary private joint stock company share transfer is not generally registered merely because a shareholder changes, but special circumstances, regulated sectors and sole-shareholder situations should be reviewed.

Can the seller continue competing after closing?

The SPA may include a proportionate non-compete clause protecting the transferred goodwill, subject to competition and enforceability limits.

Can SPA disputes be arbitrated?

Yes. International SPA disputes are frequently resolved through arbitration.

Is mediation required?

Qualifying commercial monetary claims brought before Turkish courts generally require mandatory mediation before litigation.

Conclusion

A share purchase agreement transfers ownership of a company, not merely a collection of selected assets.

The target continues to hold its:

• Contracts,
• Employees,
• Licences,
• Assets,
• Debts,
• Tax history,
• Litigation exposure.

The buyer should therefore complete legal, financial, tax and commercial due diligence before becoming unconditionally committed.

Due diligence should investigate:

• Share ownership,
• Corporate records,
• Contracts,
• Financing,
• Employees,
• Tax,
• Litigation,
• Intellectual property,
• Regulatory compliance,
• Real estate,
• Data protection.

The results should directly affect the SPA.

A discovered risk may require:

• Purchase-price adjustment,
• Pre-closing correction,
• Specific indemnity,
• Escrow,
• Retention,
• Decision not to proceed.

The purchase-price mechanism should be selected carefully.

A completion-accounts structure adjusts the price according to closing-date financial information. A locked-box structure provides greater price certainty but requires effective anti-leakage protection. An earn-out can bridge valuation differences but requires detailed rules governing post-closing management and accounting.

Warranties should cover both:

• Fundamental matters such as ownership and authority,
• Operational matters concerning the target’s business.

Known risks should ordinarily be addressed specifically rather than hidden inside general warranty language.

Seller liability provisions should regulate:

• Caps,
• Thresholds,
• Claim periods,
• Third-party claims,
• Mitigation,
• Insurance,
• No double recovery.

Where signing and closing are separated, the agreement should contain clear conditions precedent and a long-stop date.

Competition approval may be required where the transaction creates a lasting change of control and the current 2026 turnover thresholds are met. Sector-specific approval may also be necessary.

The closing process must comply with the formalities applicable to the target company.

Limited company share transfers generally require a written notarised transfer agreement and general assembly approval unless the articles provide otherwise. Joint stock company transfers depend on the share type, certificates, articles and regulatory status.

The safest transaction is one in which:

• Ownership is verified,
• Risks are quantified,
• Approvals are obtained,
• Payment and share transfer occur simultaneously,
• Post-closing rights are enforceable.