New paper is out: Acquisitions of Non-Controlling Minority Shareholdings: Assessment from a Competition Policy Perspective

New paper is out: Acquisitions of Non-Controlling Minority Shareholdings: Assessment from a Competition Policy Perspective

My paper (here) on the acquisitions of minority shareholdings is published by the Competition Journal of the Turkish Competition Authority. Acquisitions of minority shareholdings can be divided into two diverse types. In the first type, a controlling shareholder acquires a non-controlling minority share from another firm. In the second type, a non-controlling shareholder acquires another non-controlling share from another firm. This would be the case (for example) where the same investment fund acquires minority shareholding from two different firms. In this paper, I did not analyse the second type but rather focused on the first type where a controlling shareholder (or the firm itself) acquires non-controlling share from another firm. Under Turkish merger control regime, in order for a merger or an acquisition transaction to fall within the scope of Communiqué No. 2010/4, a permanent change in control is required. However, acquisition of non-controlling minority shareholdings could raise certain competition law concerns especially in cases where there is a horizontal or vertical overlap among the activities of the parties. To illustrate, an acquisition of non-controlling minority shareholding from a competitor could create an incentive for the acquirer to unilaterally increase its price since such acquisition will allow the acquirer to recapture some of its lost profits through the minority shareholding and thus will be able to gain more profit from a potential price increase. Similarly, an acquisition of non-controlling minority shareholding from a competitor could reduce the incentive of the acquirer to deviate from the cartel and thus enable the cartel to be more sustainable. Intuitively, the acquirer will have to bear some of the loss made by the other cartel participant in which it has minority shareholding.


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