Foreigners’ share in M&A drops sharply

ISTANBUL

Turkey’s mergers and acquisitions volume fell 20 percent to $17.5 billion, a report say. Hürriyet photo

Mergers and acquisitions in Turkey totaled $17.5 billion in 2013, marking a 20 percent retreat from 2012, revealing a steep drop in foreign investment appetite in the country, a report from a research company showed.

According to Deloitte’s “Mergers and Acquisitions 2013” report, 217 mergers and acquisitions (M&A) transactions, mostly driven by energy privatizations, amounted in $17.5 billion in 2013, indicating a 15 percent fall in terms of units and 20 percent in terms of amount.

The M&A volume in the country were mostly undertaken by local investors as foreign investor transactions have dropped by a quarter, touching historically low levels, the report also discovered.
Foreign investors’ transaction volume recorded a 60 percent drop compared to last year, totaling $5.2 billion, constituting 47 percent of overall activities.

Primarily American and European investors were the ones who have started shying aw
ay from the Turkish market, with Far Eastern investors standing out for the first time.
“The momentum achieved in mergers and acquisitions was interrupted in 2013 due to sociopolitical tension in the domestic market and the Feed decision’s impact on emerging markets,” Deloitte Turkey Corporate Finance Partner Başak Vardar said during a meeting held to present report yesterday.

She said the political and financial developments indicate 2014 will be a tough year as well.
M&A Advisory Leader Mehmet Sami also said the investors’ plans regarding Turkey are likely to be hurt by the rising political risk premium, despite the country “will not lose its regional attraction.”

“Investors will be pickier,” he said.