Competition Authority’s Decision on Martı’s Merger Transaction
Competition Authority’s Decision on Martı’s Merger Transaction
Turkish Competition Board [“Board”] examined the claim that e-scooter, bicycle and moped rental companies Martı İleri Teknoloji A.Ş [“Martı”] and Mobilite Teknoloji Çözümleri A.Ş [“Mobilite”] transferred their shares to foreign companies and that doing so resulted in an unauthorized acquisition transaction because Martı failed to comply with the obligation to notify under Article 7 of Law on the Protection of Competition Numbered 4054. [“Competition Law”] as indicated in its reasoned decision published on December 5, 2022.
In the decision, it was stipulated that the no merger and acquisition transaction took place contrary to the allegations set out in the application, and since the aforementioned companies are intra-group companies, an M&A transaction between them would not require approval.
Application Subject to Decision
In the application subject to the decision, it was claimed that although Martı and Mobilite appeared to be separate enterprises operating under different control structures, they in fact acted as a single enterprise and jointly controlled since their representatives and addresses recorded in the trade registry are identical. It was also among the allegations that the shares of the aforementioned companies were transferred to two different foreign companies, without notifying the Board, and that as a result, the relevant enterprises continued to hold separate quotas in the e-scooter market, worsening the effective competition and calling forth a concentration in the Turkish market.
Summary of the Board Decision
In the evaluation made by the Board regarding the application, it was determined that Martı was controlled by Martı Technologies Inc. [“Martı Inc.”] which located in the USA and Mobilite was controlled by Mobilite İşletme LLC [“Mobilite LLC”], a subsidiary of Martı Inc, and ultimately both companies were controlled by Martı Inc.
According to Martı’s statement regarding the evaluation, Mobilite started its operations in Istanbul in order to observe how consumers reacted to different brands of scooters and to test the scooters. This was in part because all kinds of trials made by Martı were widely reported in the media, and a few months later, in January 2022, Mobilite ceased its operations.
Martı also stated that the merger process of Martı Inc and Mobilite LLC in the USA has been initiated and is expected to be concluded in July, and that they are planning to merge Martı and Mobilite in Turkey after the completion of the merger in the USA.
Following the Board’s inspection, it was determined that no further action was required because the claim that Martı violated its notification obligation by instigating an unauthorized concentration transaction is untrue, primarily on the grounds that the related companies are members of the same group and that no merger or acquisition transaction between the companies in question occurred in Turkey.
In addition, the Board highlighted in its judgement that Martı and Mobilite are intra-group companies; as such, an M&A transaction between them would not be subject to the Board’s permission. Therefore, as stated in the Decision, any potential merger or acquisition transaction between Martı and Mobilite will be deemed as an intra-group transaction that does not result in a change of control and will not be considered within the scope of transactions requiring permission according to the Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board.
[Please refer to our article for further information on the Communiqué No. 2010/4 Concerning the Mergers and Acquisitions Calling for the Authorization of the Competition Board.]
