What is a carve-out?
A carve-out is the separation of a business line, product unit or subsidiary from a group so that it can be sold to a third party or established as a standalone company. It differs from a straightforward share sale in that the business being sold is not a self-contained whole before the transfer: staff, contracts, intellectual property and IT infrastructure are usually entangled with the seller’s remaining operations. That makes carve-outs one of the operationally heaviest forms of mergers and acquisitions.
How the deal is structured
- Perimeter definition: an itemised list of which assets, contracts, employees and licences fall within the transaction.
- Separation plan: splitting shared systems, branding and intra-group services, and costing the business on a standalone basis.
- Transitional services agreement (TSA): the seller continues to provide IT, accounting and HR services for a defined period after completion, for a fee.
The legal dimension
Assigning contracts generally requires counterparty consent; anti-assignment and change of control clauses in key customer and supply contracts must be reviewed one by one during due diligence. The transferability of licences and permits, the fate of group-wide intellectual property, and the transfer of customer and employee data all need separate planning. If closing occurs before separation is complete in practice, the TSA and interim licences bridge the gap.
Turkish context
The closest corporate tool in Turkish law is the partial demerger under the Turkish Commercial Code No. 6102: part of the company’s assets passes to an existing or newly formed company by partial universal succession, producing a result similar to a spin-off. Under the alternative asset sale structure, each contract and asset is transferred individually, with a heavier consent burden. For employees, the workplace transfer provisions of the Labour Law No. 4857 apply: employment contracts pass to the transferee automatically as a rule, and the transfer alone does not constitute just cause for termination.
Do: list the deal perimeter and the TSA scope in detail before signing, and identify consent-triggering contracts early with a plan for approaching counterparties. Don’t: underestimate separation costs and transition timelines, or leave shared intellectual property and data unaddressed.
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