Credit crunch to benefit Turk firms
Posted by meb at May 1st, 2008
The current international credit crunch provides a significant opportunity for financially strong Turkish companies to expand their operations internationally.
Following Godiva’s sale to Ülker for $850 million last year, analysts think the purchase of Lomisi, leader in the Georgian beer market, by Turkey’s largest brewer Anadolu Efes in February is a sign for the accelerating tendency to establish joint ventures between Turkish and foreign entrepreneurs.
Efes Breweries International, a partner company of Anadolu Efes, has bought all the shares of Lomisi, which had an estimated market share of 42 percent in 2007. Many Turkish companies, such as Doğuş, Sabancı and Pegasus, are searching for overseas acquisitions while opportunities for Turkish companies to expand globally will boom as bankruptcies abroad increase, according to experts.
The quest of Turkish companies for overseas acquisitions will make a difference in industry, said Gündüz Fındıkçıoğlu, chief economist of Türkiye Sinai ve Kalkınma Bankası (TSKB), Turkey’s only private investment and development bank. “Most Turkish companies, including banks, are conducting surveys to measure real sector risks in various countries, such as Ukraine and Azerbaijan.”
Time to make a difference:
Ülker Group has $660 million in receivables after the sale of a 60-percent share in Türkiye Finans Katılım Bankası (TFKB), a participation bank. The company does not need an underwriting participation with Citibank, said Fındıkçıoğlu, assessing most Turkish companies as financially strong.
“These financially strong companies can continue to take up debts without experiencing cost disadvantages. It is time to make a difference for strong companies by converting the credit crunch into a unique chance,” said the economist.
The credit crunch in the United States creates exceptional opportunities for Turkish companies, said Hüsnü Can Dinçsoy, a partner of Pricewaterhouse Coopers (PwC) Turkey, noting that serious bankruptcies may occur as the crunch bites the real sector.
“The Gulf benefits from this period well. They invest in the U.S. They buy companies, increase their partnerships at investment banks and continue investing in companies hit by the credit crunch. We should also direct our liquidities toward the U.S., Chinese and Indian markets,” said Dinçsoy.
Turks notice the world:
Most Turkish companies started to realize the fact that it is not possible to survive within a closed economy and that this necessitates going into partnerships with foreign corporations, said Erol Katırcıoğlu, a professor from the economics department at Bilgi University.
“A significant number of large corporations formed joint ventures with foreign companies within the last 30 years, starting from the 1980s until the establishment of the Customs Union between the European Union and Turkey, which came into effect in January 1996,” Katırcıoğlu said. “Some of the companies, such as Ülker, went one step further in acquiring foreign companies.”
Turkish companies at world stage
Ülker: One of Turkey’s major integrated food groups, Ülker acquired Belgian chocolate giant Godiva for $850 million.
Anadolu Cam: Anadolu Cam, the glassmaker owned by Turkey’s first glass factory Şişecam Group, bought Russian glass packaging company OAO Kirishsky Stekolny Zavod, which operates at a capacity of 95,000 tons per year.
Hürriyet: The mass-circulation daily paid $336.5 million to buy 67.3 percent of Trader Media East (TME), the largest classified advertising company in Central and Eastern Europe.
Doğan Group: Doğan announced it is acquiring Romania-based D-Yapı Real Estate Investment and Construction S.R.L.
Beko: The electronics giant, owned by Koç Holding, paid 40 million euros to acquire 50 percent of the shares of Grundig, which was in the hands of British company Alba. In 2004, Beko had paid 40 million euros for 50 percent of Grundig. Thus, German Grundig is now owned by Beko.
Arçelik: Turkey’s biggest maker of household appliances, part of the Koç Group, has acquired the European companies Leisure (UK), Flavel (UK), Blomberg (Germany), Elektra Bregenz (Austria), Tirolia (Austria) and Arctic (Romania).
Sabancı: The Sabancı Group purchased Dusa International, the yarn and cord fabric manufacturer. Sabancı paid $108 million for 50 percent of the company’s shares and renamed it “Kordsa International.”
Eczacıbaşı: The group bought 51 percent of ceramics giant Villeroy&Boch’s square cement floor tile section.
Anadolu Efes: Efes Breweries International bought Lomisi of Georgia. The group increased the number of its factories to 10 and expanded to seven countries in the region, including Russia.
source: Turkish Daily News
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