Buyers line up for Turk firms
Posted by meb at January 4th, 2008
2008 is expected to be the busiest period in merger activity for Turkey. While foreign capital investors seek companies to acquire in almost every sector from food to security to advertisement, domestic firms have begun lining up at the door of international consultants
Source: NECLA YILMAZ / ISTANBUL – Referans
Foreign investors, who in the past focused on Turkey’s financial sector, are signaling their desire to expand their focus to areas like cinema and food this year.
Foreign companies, thanks to professional support they receive from international consultancy firms, are currently seeking to invest in almost every sector,from food to ready-to-wear, from automobiles to energy, and even to marketing and advertisement. Not only big firms, but also small and medium size enterprises (SMEs) are being closely watched by foreign companies. A number of international consultancy firms have said 2008 will witness a striking number of cross-border mergers and acquisitions involving Turkey. Domestic firms have also begun applying to consultancy firms, preparing for mergers, business daily Referans has learned.
The most striking rumor occupying the agenda in the first days of 2008 is a possible merger by CNR International Trade Fairs Inc. It is claimed that the company is in “warm contact” with a Dubai company.
Even small players eager to buy:
Ernst&Young and Deloitte, consultancy service providers to international firms, confirmed that foreign investors have developed an increasing interest in Turkish firms.
Müşfik Cantekinler, chairman of the corporate finance division of Ernst&Young Turkey, which will announce its acquisition and merger report for 2007 on Jan. 15, said although there is a credit crunch all around the world, Turkey is not affected.
Noting that they have recently provided consultancy service for a total of four international firms, one in the food sector, two in the service sector and one in the ATV-Sabah media outlet bidding process, Cantekinler, said mostly big companies have come to Turkey so far, and added, “but even small companies have gradually started coming to Turkey now.”
The recent vibrancy in Turkish firms is caused by an increasing interest by these firms and middle size enterprises, Cantekinler added.
The energy sector will be the “star” of 2008, though there is also considerable interest in many different sectors, Cantekinler said. “For instance, some foreign companies have asked us to conduct market research on advertisement and security companies,” he said.
Domestic firms seek partners:
Cantekinler said Turkish executives, whose rivals have found foreign partners, also ask for their services, and added, “many domestic firms with endorsements around $10 to $20 million come and ask us how can they sell their company to foreigners or make cross-border mergers.” Many of these small companies are Istanbul-based, he said.
Noting that privatizations will continue in 2008, Cantekinler said many foreign companies ask them about electricity production and distribution facilities. “We have provided information and consultancy to three foreign companies about Ankara’s natural gas distribution company EGO,” he said.
Başak Vardar, Deloitte Turkey’s corporate finance partner, agreed that foreign capital investors have been increasingly interested in almost all sectors in Turkey for the last eight months. “If a domestic company has growth potential, a good brand, a certain level of market share and profitability, then, it can attract attention of foreign companies,” she said.
Supplier industry:
Turkey, practically a production base of giant firms in the automotive sector, is also expected to have vivacity in automotive parts supplier industry in 2008. Ömer Burhanoğlu, chairman of the Automobile Suppliers Association (TAYSAD), said 20 or 30 domestic firms are currently in contact with foreign companies about possible acquisitions or mergers.
Nurettin Özgenç, chairman of the Small and Medium-Sized Enterprises Association (KOBIDER), said foreign companies are now in contact with many domestic SMEs. “In the past, only those that faced financial difficulties used to approach mergers positively. But now, domestic SMEs that have no such difficulties are also eager,” he said.
Proposals for real estate:
Established by Turkish exporters, Han Yapı, a real estate company, is also receiving proposals from foreign investors. Ertuğ Yaşar, general manager of Han Yapı, said, “We are currently in contact with a U.K.-based fund for partnership for our resident projects. We are receiving proposals from Spain, Greece and Abu Dhabi, as well.”
SEM Plastik, a firm in the food packaging sector and a producer for brands like Unilever, Danone and Kraft, received merger proposals from two French and a U.S. company. SEM Plastik’s General Manager Yavuz Eroğlu said, “the packaging sector is one that is open to progress. That is why we do not think of selling some of our shares at the moment, but we are open to proposals that will add synergy to us and help us grow.”
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