Turkey hit by stall in mergers, buyouts due to global turmoil
Posted by meb at December 13th, 2008
Mergers and acquisitions in emerging markets have stalled, according to third-quarter data revealed by ISI DealWatch. During the same period, 80 merger and acquisition deals were recorded in Turkey, totaling $10.21 billion. Privatizations, however, inflate the figure by $7 billion.
The global financial crisis has stalled mergers and acquisitions, or M&As, with the number of deals standing flat in the third quarter of the year, according to a study by a market expert.
ISI DealWatch, a leading information provider on emerging market M&A activity, registered 80 M&A deals for Turkey in the period, totaling $10.21 billion in value.
From January to September, the total M&A deal value in Turkey amounted to $22.8 billion, according to DealWatch data. The figure for all of 2007 stood at $30.2 billion. A total of 179 deals were reported from January to September, compared to 191 last year.
In the third quarter of 2008, nine privatizations took place, creating $7 billion in revenue for the government. In the same period last year, there were five privatizations with a total value of $2.9 billion.
“In the [third] quarter, M&A activity in Turkey appears to have increased pace,” said Nilüfer Yıldız Sezgin, head of economic research and strategy at Fortis Bank Turkey.
“This seems to counter the global trend, but the $7 billion worth of deals were due to privatizations. In the third quarter last year, this figure was lower, at $2.9 billion.”
To map the trend, deals other than privatizations are more important indicators, Sezgin told the Hürriyet Daily News & Economic Review. “Looking at the data in this way, we observe that no acceleration is recorded in M&A activity.”
Leading activity
Manufacturing and real estate led M&A activity in the third quarter, with 22 and nine deals respectively. They were followed by utilities, wholesale trade and finance industries with eight, six and five deals respectively.
In the quarter, a total of 39 domestic deals with a total value of $2.8 billion were recorded. The number of cross-border deals, meanwhile, stood at 41, with a total value of $7.3 billion. Of these, 35 have been inbound deals, representing strong interest in Turkey from foreign investors. The most active countries were Austria, the United States, Germany, Russia and Italy.
Austrian firms sealed six deals worth $1.2 billion, while U.S. companies sealed four deals worth $138 million. The leading countries for outbound transactions were Belarus, Germany, the United States, Denmark and Macedonia.
On a global note, the most active target countries in M&A activity were Brazil, Russia, India and China, dubbed “BRIC” since 2001. In the third quarter, Russia recorded 331 deals, while the figures were 281, 182 and 160 for China, India and Brazil, respectively. Companies from BRIC nations were also the top buyers, as Russian companies carried out 321 transactions. They were followed by Chinese investors, with 236 deals, followed by Indian and Brazilian firms with 191 and 139 deals respectively.
According to the latest league tables for emerging markets M&A activity, there were a total of 2,041 M&A deals registered in emerging markets in the third quarter, representing a 1 percent fall compared to the previous period. However, the total deal value declined by 12.3 percent year-on-year, to below $159.7 billion, DealWatch said.
Impact of crisis
The fall in volume shows the negative impact of the financial crisis, according to Jakub Siekierzynski, head of DealWatch M&A Research. “Although valuations fell and the emerging markets are full of acquisition opportunities, investors applied a ’wait-and-see’ approach,” Siekierzynski said.
source: Hurriyet daily news
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