15 Jan

The growing economic clout of Turkey has lately been visible on various different fronts. Its high level of GDP growth, low levels of inflation, increasing export capacity and low ratio of public debt are all manifestations of Turkey’s economic strength. One of the areas where Turkey’s growing economy has increasingly been spreading over is the M&A activities. The regulational framework has been amended in order to pave the way for more and easier M&A activities in Turkey. The latest amendments in the Turkish law dealing with the M&A’s has specifically aimed at easing such transactions and have take the latest developments in the German, Swiss and EU regulational frameworks in order to achieve this end.

The Volumes

Despite the ill effects of the global economic recession Turkey has managed to record an unprecedented number of M&A activity in the year 2013. 336 M&A transactions took place in 2013 which is the country’s historical height. The transactions have generated a USD$ 20 billion. Such success of the Turkish economy and the business community has been even further accentuated  by the fact that 2013 has not been a good year for the M&A activities in the world. It is noteworthy to mention that only 25% of the M&A transactions had been carried out by the foreign nationals and the rest has been carried out by the Turkish companies. This is a clear indication that the Turkish business culture has been adopting itself in to the global requirements of the markets and looking to go for more M&A’s when the business demands require such transactions. Especially the family owned enterprises have recently been undergoing  a tremendous change of mentality vis-a-vis the M&A activities. Compared to the older generation the younger generation of Turkish  business leaders who have taken charge of the family enterprises after their older relatives are much more geared toward such transactions if such M&A activities offer better chances of growth in a local and global market marked by stiff competition.

Especially the Energy sector is leading the M&A transactions in Turkey in terms of the volumes involved. Total of 36 M&A activity in the Energy sector all together has generated a USD$ 6 billion. This represents a decline from 2012 volume of USD$ 9.5 billion. The biggest transaction in the energy business in 2013 was the public procurement for the privatization of EDAŞ which was won by the EnerjiSA at a cost of USD$ 1.7 billion. Compared to the year 2012 the transactions related with the public companies has increased from 54% to 61% in 2013.

The impressive growth of the Turkish M&A volumes has already attracted attention in overseas. Boston Consulting Group has named Turkey as one of the magnificent seven emerging countries for M&A activities. And despite the concerns with the global econmy related with FED and its monetary policies, there are high expectations from the year 2014 in terms of M&A transactions in Turkey. But of course much depend on the economic performance of the country and its ability to maintain its appeal as a hub for investments in its region.

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