Merger volume in energy hails by $9.5 bln in 2012

ISTANBUL

A facility of Petkim is seen in this file. Azeri SOCAR bought its major shares in privatization.

Turkey’s merger and acquisitions (M&A) volume in energy jumped to $9.5 billion last year from a mere $1.2 billion in 2011, according to a PricewaterhouseCoopers report released yesterday.

The total deal volume, worth $9.5 billion with 45 deals in 2012, exceeded market expectations by multiplying the 2011 figures nearly seven times. In 2011 there were 29 deals worth $1.237 billion.
The number of deals was composed of 37 utilities (power and gas distribution grids) deals worth $9.1 billion and eight oil and gas deals worth $400 million.

The report indicates the privatizations in 2012 made up the major part of this volume, as the Boğaziçi, Gediz and Akdeniz electricity distribution companies and Seyitömer power plant tenders by $5.985 billion boosted the volume in the utilities sector. Also, Azerbaijan’s Socar, which already owned 51 percent of petrochemical company Petkim, bought 10.32 percent of the company for $168 million in a privatization tender, it said.

However, many private deals, particularly German E.ON SE’s acquisition of a 50 percent stake in Enerjsa, show a healthy growth in the utilities sector, the report noted.

Local investors dominated the merger and acquisitions activities in energy, by owning 75 percent share of total deal volume. Meanwhile, the important foreign deals were Gazprom’s subsidiary Prima Energy’s acquisition of a 60 percent stake in Avrasya Gaz, Inter RAO’s acquisition of a 90 percent stake in Trakya Elektrik, and E.ON and SOCAR’s acquisitions. The report claims that the privatization deals will continue to dominate the deals outlook in 2013.

New M&A figures

Another report released by Ernst&Young yesterday said Turkey’s mergers and acquisitions volume had reached $23.2 billion, with 315 transactions last year. However, a Jan. 3 Deloitte report had revealed that the 2012 volume was $28 billion, with 259 transactions.

The two reports also foresee M&A activities to continue increasing in Turkey in 2013, with small and medium-sized enterprises making up the major share.