Turkish companies’ FDI outflow exceeds $15 billion over two years: Index
REUTERS photoTurkish companies made $5.2 billion in greenfield investments and realized $10 billion in mergers and acquisitions (M&As) in foreign countries in 2014 and 2015, totaling more than $15 billion foreign direct investments abroad, according to an index which was released on May 17.
Turkish businesses made a total of 52 greenfield investments worth $2.4 billion in 2015 and 100 such investments worth $2.8 billion in 2014, according to the first Foreign Investments of Turkey Index, which was jointly prepared by the Foreign Economic Relations Board (DEİK) and Deloitte Turkey.
Turkish companies made a total of 35 M&A transactions worth $3.5 billion in 2015 and 41 M&As worth $6.5 billion in 2014, according to the index.
In the 2014-2015 period, the merger and acquisition transactions were made mainly in manufacturing and infrastructure sectors, followed by energy, real estate, internet, mobile services and technology sectors, according to the report. In greenfield investments, the manufacturing sector and the retail sector took the lion’s share, followed by finance, logistics, home appliances, food and construction sectors.
Investments flock to high-income countries
In 2014 and 2015, Turkish companies mainly preferred to make investments in both ways mainly in high-income countries, including Germany, the United States, Russia, Britain and Spain, according to the report.
In the mentioned period, the U.S. attracted the largest amount of M&A investments with a total of 12 transactions, followed by Germany, Russia, Italy, Croatia and the Netherlands. In greenfield investments, Germany took the most with a total of 32 investments, followed by Romania, Macedonia, the U.S., Russia and Germany.
The index was prepared in a bid to measure the attractiveness and perception of foreign countries in terms of investment from the eyes of Turkish companies. In this vein, countries have been ranked according to several parameters, including their development level, market volume, workforce, logistics costs and raw material potentials as well as their economic and political ties with Turkey.
The report ranked China among the middle-lower income group of countries and the U.S. among high-income countries first for Turkish investors in terms of feasibility to make investment.
The U.S. is followed by Sweden, Finland, France, the Netherlands and Germany in the high-income group, while China is followed by Romania, Iran, Poland and Kazakhstan in the related group.
Europe took the largest amount of investments in 2015 with a total of 53 transactions worth $4.3 billion.
While Turkish companies realized 12 transactions worth $630 million in the Americas, they made around $170 million investments in Africa and Middle East. They clinched 11 transactions worth $640 million in Eurasia and five transactions worth $180 million in Asia Pacific in the mentioned year, according to the report.
Deloitte Turkey Partner and Financial Consultancy President Başak Vardar said Turkish companies have recently eyes on privatization tenders, brand acquisitions and several greenfield investments abroad.
“We expect this trend will be popular in the upcoming period,” Vardar noted.
Vardar noted that there was a significant rise in M&As abroad in the last four years, adding that some 200 of all 250 M&A transactions in the last decade were made in the last four years.