Domestic interest in mergers increase
Posted by meb at January 16th, 2008
Mergers and acquisitions in Turkey reached a total volume of $26.7 billion last year, according to an Ernst&Young report released yesterday.
The year’s first report, by Deloitte on Jan. 7, put the overall figure at $20.6 billion.
Foreign investors outpaced local ones, with a total investment of $16.7 billion, while the sector leader in M&As was airport administration, with a total volume of $6.7 billion.
The share of foreigners in the total M&A volume was 66 percent, while in terms of volume, their investment was at more or less the same level as in 2005 and 2006.
The reason for this “stalling,” according to the report, titled “Mergers and Acquisitions 2007,” was the rapid rise in local interest in M&As. Turkish investors accounted for 34 percent of the total M&A volume, a ratio which means they increased their size four-fold compared to 2006. Local investments in M&As were $8.6 billion.
A total of 182 M&A transactions were realized last year, and foreigners accounted for 92 of them. The United States led in terms of number of transactions, while the Netherlands ranked number one in terms of transaction volume, reported the Anatolia news agency.
The overall figure of $26.7 billion was still an estimate, as the value of only 135 of the transactions were made public.
Leading sectors:
The leading sector of 2007 in M&As was airport administration, as two of the biggest transactions were realized in this sector. Sabiha Gökçen Airport and Antalya Airport were acquired for $3.1 billion and $3.2 billion, respectively.
The second sector was finance, with a transaction volume of $6.3 billion. The leading acquisition in the sector was the sale of Oyakbank to ING for $2.7 billion, while NBC acquired Türkiye Finans Participation Bank for $1.08 billion. The insurance sector also showed renewed activity, with the Garanti Sigorta-Eureko merger of $488 million and Genel Sigorta-Mapfre merger of $375 million.
According to Ernst&Young, private equity funds performed below expectations. They accounted for 13 transactions worth $1.9 billion in 2007, whereas the figure stood at 26 in 2006. According to the report’s forecast, the buzz in M&As will continue this year. The total transaction volume is expected to reach $20 billion, while volume of privatizations are expected to reach $10 to $12 billion. Ernst&Young Turkey executive, Müşfik Cantekinler, said he received information from the Privatization Administration that the National Lottery “will certainly be privatized this year.”
The business world expects the activity to focus on finance, energy, real estate, retail and transportation. According to an Ernst&Young poll, businessmen chose Petkim’s privatization as the “acquisition of the year,” while the sale of Oyakbank ranked second.
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