Purchase Price Adjustment Disputes in Turkish M&A Deals: Legal Remedies (2026 Updated Guide)

Purchase price adjustment disputes in Turkish M&A transactions can involve working capital, net debt, cash, completion accounts and earn-outs. Learn the legal remedies available to foreign investors, buyers and sellers.

Purchase price adjustment disputes are among the most financially significant post-closing conflicts in Turkish mergers and acquisitions. A buyer may claim that the final purchase price should be reduced because net debt was higher, working capital was lower or liabilities were understated. The seller may argue that the buyer changed accounting policies after closing, manipulated completion accounts or attempted to recover through the adjustment mechanism matters that were already addressed by warranties or indemnities. For foreign investors acquiring Turkish companies, the decisive issues are usually the wording of the Share Purchase Agreement (SPA), agreed accounting principles, calculation hierarchy, closing accounts, expert determination provisions and dispute-resolution clause.

Why Do Purchase Price Adjustment Disputes Arise?

The purchase price stated when an SPA is signed is not always the amount ultimately paid. Many transactions use an estimated price at closing followed by a post-closing calculation based on agreed financial metrics.

Disputes frequently concern net debt, cash, normalized working capital, transaction expenses, leakage, shareholder loans, unpaid taxes, employee liabilities, provisions, receivables or other balance-sheet items.

Completion Accounts Versus Locked Box

The first question is which pricing mechanism the parties selected. Under a completion-accounts structure, the purchase price is adjusted after closing using financial information as of the agreed closing date.

A locked-box structure generally fixes the equity value by reference to an earlier balance sheet and protects the buyer primarily through restrictions on leakage between the locked-box date and closing.

Confusing these two mechanisms can lead to fundamentally incorrect claims.

The SPA Is the Starting Point

Purchase price adjustment disputes should begin with the contractual formula rather than general accounting preferences.

The SPA should be reviewed for the definition of cash, debt, working capital, transaction expenses, leakage, accounting principles, calculation procedures, objection deadlines and dispute-resolution mechanisms.

Accounting Principles Often Decide the Case

A frequent dispute arises because the parties agree that completion accounts will follow particular accounting standards but fail to establish a clear hierarchy.

The agreement may refer to specific accounting policies, historical accounting practices, agreed principles and generally applicable accounting standards. The order in which those rules apply can determine the result.

Historical Practice Can Be Critical

A buyer may argue that an accounting treatment is technically more appropriate. The seller may respond that the SPA expressly requires consistency with the target company’s historical accounting practices.

The contractual hierarchy should therefore be analyzed before deciding which accounting approach controls.

Working Capital Disputes

Working capital adjustments are intended to ensure that the business is delivered with an agreed level of ordinary operating capital.

Disputes may involve receivables, inventory, trade payables, accrued expenses, customer advances and other current assets or liabilities.

What Is Normalized Working Capital?

Many transactions establish a target or normalized level of working capital based on historical operations.

If actual working capital at closing falls below the target, the purchase price may decrease. If it exceeds the target, the price may increase, depending on the SPA.

Seasonal Businesses Require Special Attention

A single working-capital target can create distortions where the target company operates seasonally.

Historical monthly data, business cycles and the closing date should therefore be considered when negotiating and interpreting the adjustment mechanism.

Net Debt Is a Major Source of Disputes

The definition of debt is often broader than ordinary bank borrowing.

Depending on the SPA, debt-like items may include shareholder loans, accrued interest, unpaid taxes, finance leases, factoring arrangements, overdue employee obligations, deferred payments or other liabilities.

The precise contractual definition controls.

Debt-Like Items Must Not Be Invented After Closing

A buyer should not automatically characterize every unfavorable balance-sheet item as debt.

If the SPA contains an exhaustive or carefully negotiated definition, the buyer’s ability to add new categories after closing may be restricted.

Cash Can Also Become Controversial

The parties may disagree over restricted cash, trapped cash, deposits, foreign-currency balances, petty cash or funds subject to third-party claims.

Whether a particular amount constitutes “cash” should be determined under the SPA.

Double Counting Must Be Prevented

One of the most important forensic issues is whether the same economic item has been counted twice.

A liability should not normally reduce the purchase price through net debt and then reduce it again through working capital unless the contract clearly supports that treatment.

Transaction Expenses Can Affect the Final Price

Unpaid adviser fees, transaction bonuses, legal fees and other deal-related expenses may be allocated to the seller through the purchase price mechanism.

The definition should be reviewed carefully to determine which expenses qualify and when they must have been incurred.

Tax Liabilities Can Create Overlap

A tax item may potentially interact with purchase price adjustments, tax warranties and specific indemnities.

The parties should determine whether the claim belongs in completion accounts or under another SPA remedy.

Purchase Price Adjustment and Warranty Claims Are Different

A buyer may attempt to characterize the same issue simultaneously as a price adjustment and a breach of warranty.

The SPA should be examined for anti-double-recovery provisions and the intended boundary between the mechanisms.

Indemnity Claims Must Also Be Separated

Specific indemnities usually address identified risks. Completion accounts generally calculate the agreed economic position at closing.

A party should not use one mechanism to circumvent contractual restrictions applicable to another.

Buyer Manipulation of Completion Accounts

A seller may suspect that the buyer deliberately changed accounting treatment after obtaining control of the company.

Potential concerns include accelerated provisions, reclassification of liabilities, altered inventory valuation or changed revenue-recognition treatment.

The seller should compare the disputed accounts with the SPA and historical accounting records.

Post-Closing Control Does Not Give Unlimited Accounting Discretion

Although the buyer controls the company after closing, completion accounts should still be prepared according to the contractual methodology.

The buyer cannot automatically rewrite the agreed pricing formula merely because it now controls the target’s accounting department.

Preserve the Closing-Date Evidence

The parties should preserve trial balances, general ledgers, bank statements, receivable aging, inventory records, tax information and other financial evidence existing around closing.

Post-closing accounting changes can otherwise make reconstruction difficult.

The Objection Deadline Is Critical

Many SPAs give the seller only a limited period to object to the buyer’s completion statement.

Missing this contractual deadline may have serious consequences.

The seller should therefore begin reviewing the calculation immediately upon receipt.

An Objection Must Be Specific

A general statement that the calculation is rejected may not satisfy the contractual procedure.

The objection should identify disputed line items, amounts, accounting treatment and contractual basis wherever required.

Undisputed Amounts Should Be Identified

Many agreements distinguish between disputed and undisputed portions of the adjustment.

The parties should determine whether undisputed amounts must be paid while the remaining calculation proceeds to expert determination or another dispute process.

Expert Determination Is Common

SPAs frequently provide that unresolved accounting disputes will be referred to an independent accountant or financial expert.

The scope of that expert’s authority should be examined carefully.

Expert Determination Is Not Always Arbitration

The distinction can be extremely important. An accounting expert may be empowered only to resolve specified calculation questions rather than broader contractual disputes.

Issues concerning fraud, contractual interpretation, breach of warranty or legal liability may fall outside the expert’s mandate depending on the SPA.

What If the Parties Cannot Agree on the Expert?

The SPA should contain an appointment mechanism.

If it does not, the parties may face a preliminary dispute before the substantive adjustment can even be determined.

Contract Interpretation May Require Arbitration or Court Proceedings

Suppose the dispute is not about the amount of a receivable but whether the SPA definition permits that receivable to be included at all.

That can become a legal interpretation issue rather than a pure accounting calculation.

The dispute-resolution clause should therefore be analyzed together with the expert-determination clause.

Foreign Investors Should Review Governing Law

A Turkish target does not automatically mean every contractual dispute is governed by Turkish law.

Cross-border M&A agreements may select Turkish law or another governing law, subject to applicable mandatory rules and conflict-of-laws considerations.

The governing-law clause must therefore be checked first.

Arbitration Is Common in Cross-Border M&A

International transactions frequently use arbitration because the parties want a neutral forum, confidentiality and an internationally enforceable award.

The arbitration clause should be examined for seat, institution, language, number of arbitrators and scope.

Turkish Courts May Still Become Relevant

Even where the SPA contains arbitration, Turkish courts may become relevant for interim measures, enforcement or issues outside the arbitration agreement, depending on the circumstances.

Jurisdiction should therefore be assessed transaction by transaction.

Interim Measures May Be Necessary

A purchase price dispute can become urgent where escrow funds are about to be released, security is expiring or assets may be transferred.

The availability of interim legal protection should be considered before the disputed funds become difficult to recover.

Escrow Arrangements Can Reduce Enforcement Risk

Some M&A transactions hold part of the purchase price in escrow to secure post-closing adjustments.

The escrow agreement should be reviewed together with the SPA because release mechanics may impose separate notice requirements and deadlines.

Holdbacks Require Similar Attention

Where the buyer retains part of the purchase price, the seller should determine exactly when the holdback becomes payable and what claims permit continued retention.

A buyer should not treat a general holdback as an unlimited source for unrelated claims.

Earn-Outs Can Create Separate Valuation Disputes

An earn-out links additional consideration to post-closing financial or operational performance.

Disputes may arise over EBITDA, revenue, customer retention, production targets or other metrics.

Buyer Conduct Can Affect an Earn-Out

The seller may argue that the buyer changed the business after closing in a way that artificially reduced the earn-out.

The SPA should therefore be reviewed for operating covenants, good-faith obligations and restrictions concerning manipulation of earn-out metrics.

Financial Experts Should Work With Legal Counsel

Purchase price disputes usually contain both accounting and legal issues.

An accountant can calculate the disputed figure, while legal counsel determines whether the contractual definition permits the accounting treatment in the first place.

Separating these disciplines too sharply can weaken the case.

Foreign Sellers Need Access to Company Records

After closing, the seller may no longer control the target.

The SPA should therefore provide access to books and records necessary to review completion accounts.

If access is refused, the seller should document the request and evaluate available contractual remedies.

Data Preservation Is Essential

Emails between finance teams, spreadsheets used during negotiations, draft completion calculations and historical accounting-policy documents can become important evidence.

Relevant electronic records should be preserved once a dispute becomes foreseeable.

Pre-Contract Negotiations May Become Relevant

Depending on the governing law and dispute context, negotiation history may help explain how a particular adjustment provision developed.

Draft SPAs and financial models should therefore not automatically be discarded.

Fraud or Deliberate Concealment Changes the Dispute

If a party alleges manipulated accounts, concealed liabilities or falsified financial information, the dispute may extend beyond an ordinary completion-account disagreement.

Civil, contractual and potentially other legal consequences may need separate analysis.

Seller Misrepresentation Can Lead to Additional Claims

If the seller deliberately concealed liabilities that affected the purchase price, the buyer may have remedies beyond the mechanical adjustment formula, depending on the SPA and governing law.

Buyer Overreach Can Also Be Challenged

Conversely, a buyer should not use completion accounts to renegotiate the transaction after closing.

A seller may challenge calculations that contradict agreed definitions or improperly introduce risks the buyer knowingly accepted when signing.

Interest on Unpaid Adjustments

The SPA should be checked for interest applicable to delayed adjustment payments.

Where the agreement is silent, the governing law becomes particularly important.

Currency Issues Can Change the Calculation

Cross-border deals may use foreign-currency purchase prices while the target maintains accounts in another currency.

The applicable exchange rate and calculation date should be determined according to the SPA.

Foreign Exchange Movements Should Not Rewrite the Deal

Unless the agreement provides otherwise, subsequent currency fluctuations should not be allowed to distort a calculation designed to measure the company’s financial position at closing.

Limitation and Contractual Claim Periods Matter

Purchase price adjustment procedures can contain much shorter deadlines than ordinary contractual claims.

Notice deadlines, expert referral periods, arbitration periods and statutory limitation rules should all be reviewed separately.

Settlement Can Be Commercially Efficient

A technically strong claim does not always justify years of M&A litigation.

Where the disputed amount is relatively small compared with litigation or arbitration costs, structured settlement may preserve commercial value.

Mediation Can Be Considered

Depending on the dispute, governing framework and contractual structure, mediation can provide an efficient forum for resolving valuation and post-closing disagreements without sacrificing confidentiality.

2026 Strategy for Foreign Investors

Foreign buyers and sellers involved in Turkish M&A transactions should approach purchase price adjustments as a structured legal and financial process rather than a simple accounting exercise. The transaction team should identify the contractual calculation hierarchy, preserve closing-date evidence, monitor objection periods, separate adjustment claims from warranty and indemnity claims, prevent double recovery, involve financial experts early and determine whether unresolved issues belong before an accountant, arbitrator or court.

Frequently Asked Questions

What is a purchase price adjustment in an M&A transaction?

It is a contractual mechanism that adjusts the transaction price by reference to agreed financial metrics such as net debt, cash or working capital.

What causes most purchase price adjustment disputes?

Common causes include different accounting treatments, disagreement over debt-like items, working-capital calculations, transaction expenses and inconsistent application of the SPA definitions.

Can the buyer change accounting policies after closing?

The buyer may operate the company after closing, but the purchase price calculation must still follow the contractual methodology governing the adjustment.

Can the same liability be claimed as both a price adjustment and an indemnity?

The SPA must be examined carefully. Anti-double-recovery provisions may prevent the buyer from receiving compensation twice for the same economic loss.

What happens if the seller misses the objection deadline?

The consequences depend on the SPA, but contractual objection periods can be decisive. Completion statements should therefore be reviewed immediately.

Is an independent accountant’s decision the same as arbitration?

Not necessarily. Expert determination and arbitration are legally and procedurally distinct mechanisms, and the expert’s jurisdiction may be limited to specified accounting issues.

Can a foreign investor seek an interim measure?

Potentially, particularly where escrow funds, securities or other assets are at risk. The appropriate remedy depends on the dispute-resolution structure and circumstances.

Can purchase price disputes involve fraud allegations?

Yes. Deliberately manipulated accounts, concealed liabilities or false financial information can transform an accounting dispute into a broader legal conflict.

Are earn-out disputes purchase price disputes?

Yes, broadly speaking. Earn-outs can generate post-closing disputes concerning financial metrics, business operation and alleged manipulation of performance.

What should a foreign buyer or seller do first?

Review the SPA’s exact pricing formula, accounting hierarchy, objection procedure and dispute-resolution mechanism before debating the accounting numbers. In many M&A disputes, the contractual definition determines the result before the financial calculation begins.

Client-Focused Legal Support for Turkish M&A Purchase Price Disputes

Fırat Fesih Kaya Law Office assists foreign investors, international companies, buyers, sellers and shareholders in Turkish M&A disputes involving purchase price adjustments, completion accounts, net debt, working capital, escrow, holdbacks, earn-outs, warranties, indemnities and post-closing claims. Lawyer Fırat Fesih Kaya provides legal assistance in SPA interpretation, negotiation of post-closing claims, coordination with financial experts, interim measures, mediation, litigation and arbitration arising from Turkish corporate acquisitions.

Phone: +90 312 434 22 22

Mobile / WhatsApp: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr

Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey