Conditions Precedent in Turkish Share Purchase Agreements: What Foreign Investors Should Verify Before Closing – 2026 Updated Guide

Learn which conditions precedent foreign investors should verify before closing a Turkish share purchase agreement, including approvals, licenses, debt, title and disclosure.

Conditions precedent are requirements that must be satisfied before a foreign buyer is required to complete a Turkish share acquisition.

If a condition precedent is not fulfilled, the buyer may be entitled to delay closing, request a waiver, terminate the Share Purchase Agreement or claim contractual remedies. The exact result depends on the SPA, the transaction structure and the wording of each condition.

This 2026 updated guide explains what foreign investors should verify before closing a Turkish share purchase agreement.

What Are Conditions Precedent?

Conditions precedent are agreed events or documents that must exist before the parties complete closing.

They may concern corporate approvals, regulatory permissions, debt repayment, third-party consents, accuracy of warranties, absence of litigation, delivery of closing documents or the target company’s financial condition.

A condition precedent is different from a post-closing covenant. A condition must generally be satisfied before closing, while a covenant may require the parties to take action after closing.

Why Are Conditions Precedent Important?

Conditions precedent protect the buyer from completing a transaction when an essential legal, financial or commercial requirement has not been met.

They may prevent the buyer from acquiring a company with undisclosed debt, missing licenses, invalid ownership, blocked bank facilities or a significant deterioration in value.

A buyer should not treat conditions precedent as standard boilerplate. Each condition should be connected to a specific transaction risk.

Which Corporate Approvals Should Be Verified?

The buyer should verify that the seller has authority to sell the shares and that the target company has completed all required corporate approvals.

The review may include shareholder resolutions, board decisions, signature authority, share registers, share certificates, powers of attorney and approvals required under the company’s articles.

If the seller is a company, the buyer should also confirm that its own internal approvals were properly obtained.

Are Regulatory Approvals Required?

Some transactions may require merger-control filings, sector-specific approvals or change-of-control consent.

Regulated industries such as banking, insurance, energy, telecommunications and other licensed activities may impose additional requirements. The transfer of a license or a change in control may also require prior approval.

Not every Turkish share acquisition requires regulatory approval. The buyer should assess the parties, market size, business sector and transaction structure before assuming that no filing is necessary.

What Third-Party Consents May Be Needed?

The target company’s contracts may require consent from banks, landlords, joint-venture partners, franchisors, key customers or suppliers.

A change in ownership may trigger termination rights, repayment obligations or a breach of a financing covenant.

The buyer should identify all material contracts and obtain written consents or waivers where necessary before closing.

Should Existing Debt Be Repaid Before Closing?

The buyer should verify the target company’s bank loans, overdrafts, guarantees, letters of credit, leasing obligations and other financial liabilities.

The SPA may require the seller to repay or refinance debt before closing and provide payoff letters or releases from banks.

Mortgages, pledges, liens and other security rights should also be identified. A debt-free closing condition should be matched with bank and registry evidence.

Should the Buyer Verify Ownership of the Shares?

The buyer should confirm that the seller legally owns the shares and that they are free from pledges, attachments, usufruct rights, options or other restrictions.

The share register, corporate records, transfer history and security registrations should be reviewed.

If the shares are subject to a dispute or enforcement measure, closing may expose the buyer to ownership and control problems.

What Financial Conditions Should Be Checked?

The buyer should verify closing accounts, net debt, working capital, cash, receivables, inventory and undisclosed liabilities.

The SPA may include a condition that the seller’s financial statements and warranties remain accurate at closing.

The buyer should also review new loans, related-party transactions, unusual payments, customer losses, tax assessments and material changes since signing.

How Does a Material Adverse Change Condition Work?

Some SPAs require that no Material Adverse Change occur between signing and closing.

The buyer should determine whether a material loss of revenue, key customer, license, asset or business opportunity falls within the clause.

General economic or industry-wide changes may be excluded. The clause should be interpreted according to its wording, exclusions, materiality threshold and any disproportionate-impact test.

Should Litigation and Enforcement Be Cleared?

The buyer should verify whether the target is involved in lawsuits, arbitration, enforcement proceedings, tax disputes, employment claims or regulatory investigations.

The buyer should also check attachments against bank accounts, real estate, vehicles, shares and receivables.

A condition precedent may require that no material proceeding exists or that specific disputes are settled, insured or fully disclosed.

What Licenses and Permits Should Be Verified?

The target company’s business licenses, operating permits, environmental approvals, construction permissions and sector authorizations should be reviewed.

The buyer should confirm that the licenses are valid, transferable where necessary and not subject to suspension, cancellation or renewal problems.

A missing permit may prevent the buyer from using the company’s assets or continuing its business after closing.

What Seller Deliverables Are Usually Required?

Closing deliverables may include signed transfer documents, updated share records, resignation letters, new appointment documents, board resolutions, bank-signature changes and releases from security holders.

The buyer should prepare a closing checklist and require documentary proof for each condition.

A closing certificate signed by the seller may confirm that warranties remain accurate and that conditions have been satisfied.

Can a Condition Precedent Be Waived?

A buyer may be able to waive a condition if the SPA permits waiver and the condition exists primarily for the buyer’s benefit.

Waiver should be deliberate and recorded in writing. The buyer should understand whether waiving one condition affects indemnity, warranty or termination rights.

A buyer should not waive an approval, ownership requirement or mandatory legal condition that cannot lawfully be ignored.

What Happens If a Condition Is Not Satisfied?

The buyer may be entitled to postpone closing, request a cure, refuse to close, terminate the SPA or claim damages depending on the agreement.

The buyer should issue a formal notice identifying the unmet condition and the contractual consequence.

If the seller argues that the condition was satisfied or improperly withheld, the dispute may proceed to court, arbitration or expert determination.

Can the Seller Claim That the Buyer Wrongfully Refused to Close?

Yes. If the buyer refuses to close without a valid contractual or legal basis, the seller may claim breach, seek the deposit or pursue damages.

The buyer should therefore obtain evidence before relying on a condition precedent. Expert accounting, legal opinions, regulatory records and third-party confirmations may be important.

The buyer should also comply with notice, cure and dispute-resolution procedures.

What Remedies Are Available to the Buyer?

Depending on the SPA, the buyer may request correction, extension, specific performance, return of the deposit, price adjustment, indemnity, damages or termination.

If the seller concealed a material problem, the buyer may also consider misrepresentation or fraud claims.

The most appropriate remedy depends on whether the buyer still wants the company and whether the condition can be cured.

What Evidence Matters in 2026?

In 2026, electronic data rooms, digital signatures, electronic corporate records, online registry information, accounting systems and email communications may be essential.

The buyer should preserve the exact version of the SPA, disclosure schedules, financial models, closing checklist and data-room documents.

The buyer should also document when each condition was satisfied, by whom and with what evidence.

Can a Foreign Investor Act from Abroad?

A foreign investor does not always need to travel to Turkey. A Turkish lawyer may review the SPA, verify closing conditions, issue notices and coordinate closing documents under a valid power of attorney.

Depending on the issuing country, legalization, apostille and official translation may be required.

Lawyer Fırat Fesih Kaya assists foreign investors with Turkish share acquisitions, conditions precedent, M&A due diligence, closing disputes and SPA remedies.

2026 Legal Considerations

Foreign investors should negotiate precise conditions precedent rather than relying on general assurances. Each condition should identify the responsible party, evidence required, deadline, cure period and consequence of failure.

The buyer should also review current rules concerning merger control, sector licenses, change of control, corporate approvals, digital signatures and registry filings.

The applicable rules on M&A agreements, foreign investment, evidence, termination, indemnity and dispute resolution should be reviewed before closing.

Frequently Asked Questions (FAQ)

1. What are conditions precedent in a Turkish SPA?

They are requirements that must be satisfied before the buyer is required to complete the share acquisition.

2. Can a foreign buyer refuse to close if a condition is not met?

Potentially, if the unmet condition gives the buyer a contractual right to delay or terminate closing.

3. Are regulatory approvals always required?

No. Requirements depend on the industry, transaction structure, market position and change-of-control rules.

4. Should existing bank loans be repaid before closing?

The SPA may require repayment, refinancing or bank consent. The buyer should obtain written evidence and security releases.

5. Can a buyer waive a condition precedent?

A condition may be waivable if the SPA permits it and the condition is legally capable of being waived.

6. What if the seller concealed a pending lawsuit?

The buyer may pursue indemnity, damages, price adjustment or another remedy depending on the SPA and the materiality of the concealment.

7. Can a material adverse change prevent closing?

It may, if the event satisfies the MAC clause and is not excluded by the agreement.

8. What if the shares are pledged or attached?

The buyer should require release or resolution of the restriction before closing unless the SPA provides another protected structure.

9. What happens if the buyer wrongfully refuses to close?

The seller may claim breach, damages or the deposit. The buyer should rely on documented contractual grounds.

10. Can a foreign investor verify conditions without traveling to Turkey?

In many cases, yes. A Turkish lawyer may coordinate due diligence and closing under a valid power of attorney.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Foreign Investors

Conditions precedent help foreign buyers control closing risk in Turkish share acquisitions. Careful verification of approvals, debt, ownership, licenses, litigation and financial statements can prevent serious post-closing disputes.

Fırat Fesih Kaya Law Office provides professional legal support to foreign investors in SPA drafting, M&A due diligence, closing conditions, regulatory approvals, acquisition disputes and commercial litigation.

Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower, Balgat, Cankaya, Ankara, Turkey