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M&A VOLUME TO REACH $ 10 BILLION IN 2010
Mergers and acquisitions, which stalled last year due to the global credit crunch, may surge this year in Turkey to about $10 billion, led by privatizations and buyouts mainly in the energy sector, according to a Deloitte report released Wednesday.
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: 08.01.2010 |
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Last year was a silent one for mergers and acquisitions in Turkey, as investors could not participate in privatizations. According to a Deloitte report, total M&A deal volume in 2009 stood at $5.8 billion, with 102 transactions. This year, Deloitte expects the volume to reach $10 billion, with more privatizations in the pipeline
The Bosphorus Bridge is among the assets to be privatized this year, according to the Privatization Administration's 2010 portfolio.
Mergers and acquisitions, which stalled last year due to the global credit crunch, may surge this year in Turkey to about $10 billion, led by privatizations and buyouts mainly in the energy sector, according to a Deloitte report released Wednesday.
The report said last year a total of 102 mergers and acquisitions, or M&As, took place in Turkey, with an overall transaction volume of $5.8 billion. The figure represents an annual decline of 64 percent, while the number of transactions fell 40 percent. Moreover, half of the total transaction value occurred in the last quarter of 2009, mainly due to privatizations, which accounted for 31 percent of all transaction volume.
The share of foreign investors declined to 38 percent in the overall figure.
“As the most inactive period of the past five years is left behind us, this year we predict a recovery, in which the energy sector and privatizations will be determining,” Deloitte said.
“We left behind a year in which investors and financiers were extremely silent and closure of deals experienced many delays and difficulties,” said Başak Vardar, Deloitte Turkey’s institutional financing partner. “2010 will be a year in which investors and Turkish entrepreneurs will see the path forward more clearly. This will result in a certain acceleration in M&A activity.”
Despite some economic and political risks, Turkey remains one of the most attractive markets for foreign investors, the report said. Deloitte expects “strategic investors” to acquire businesses in sectors such as energy, cement, food and pharmaceuticals.
The share of foreign investors stood at nearly 80 percent in total M&A volumes in previous years, but in 2009, the ratio retreated to 38 percent. The total volume of transactions by foreigners also declined 85 percent, compared to 2008.
Domestic stamp in deals
Turkish companies put their mark on six privatizations, totaling $1.8 billion in volume last year. Four Turkish firms that won four tenders accounted for 30 percent of the annual transaction volume. The share of domestic companies in the overall transaction volume jumped to 62 percent, from below 25 percent in previous years.
Nearly all M&As in 2009 were “medium-sized” deals, with only one transaction surpassing the $500 million mark. The average deal value stood at $55 million, compared to $100 million in 2008. Putting aside privatizations and the top five private sector deals, average deal size was only $35 million last year, signaling how the global crisis eroded asset values.
Financial investors were mainly “quiet” last year, accounting for only 12 percent of overall deal volume with eight transactions.
The government plans to continue privatizing electricity distribution grids and power plants, natural gas distribution grids, highways, the National Lottery, sugar factories and Halkbank this year. Deloitte predicts an overall M&A volume of $10 billion.
The report also said “tens of companies” are currently preparing for initial public offerings and are expected to press the button after the third quarter.
Wednesday, January 6, 2010
ISTANBUL - Hürriyet Daily News
The Bosphorus Bridge is among the assets to be privatized this year, according to the Privatization Administration's 2010 portfolio.
Mergers and acquisitions, which stalled last year due to the global credit crunch, may surge this year in Turkey to about $10 billion, led by privatizations and buyouts mainly in the energy sector, according to a Deloitte report released Wednesday.
The report said last year a total of 102 mergers and acquisitions, or M&As, took place in Turkey, with an overall transaction volume of $5.8 billion. The figure represents an annual decline of 64 percent, while the number of transactions fell 40 percent. Moreover, half of the total transaction value occurred in the last quarter of 2009, mainly due to privatizations, which accounted for 31 percent of all transaction volume.
The share of foreign investors declined to 38 percent in the overall figure.
“As the most inactive period of the past five years is left behind us, this year we predict a recovery, in which the energy sector and privatizations will be determining,” Deloitte said.
“We left behind a year in which investors and financiers were extremely silent and closure of deals experienced many delays and difficulties,” said Başak Vardar, Deloitte Turkey’s institutional financing partner. “2010 will be a year in which investors and Turkish entrepreneurs will see the path forward more clearly. This will result in a certain acceleration in M&A activity.”
Despite some economic and political risks, Turkey remains one of the most attractive markets for foreign investors, the report said. Deloitte expects “strategic investors” to acquire businesses in sectors such as energy, cement, food and pharmaceuticals.
The share of foreign investors stood at nearly 80 percent in total M&A volumes in previous years, but in 2009, the ratio retreated to 38 percent. The total volume of transactions by foreigners also declined 85 percent, compared to 2008.
Domestic stamp in deals
Turkish companies put their mark on six privatizations, totaling $1.8 billion in volume last year. Four Turkish firms that won four tenders accounted for 30 percent of the annual transaction volume. The share of domestic companies in the overall transaction volume jumped to 62 percent, from below 25 percent in previous years.
Nearly all M&As in 2009 were “medium-sized” deals, with only one transaction surpassing the $500 million mark. The average deal value stood at $55 million, compared to $100 million in 2008. Putting aside privatizations and the top five private sector deals, average deal size was only $35 million last year, signaling how the global crisis eroded asset values.
Financial investors were mainly “quiet” last year, accounting for only 12 percent of overall deal volume with eight transactions.
The government plans to continue privatizing electricity distribution grids and power plants, natural gas distribution grids, highways, the National Lottery, sugar factories and Halkbank this year. Deloitte predicts an overall M&A volume of $10 billion.
The report also said “tens of companies” are currently preparing for initial public offerings and are expected to press the button after the third quarter.
Wednesday, January 6, 2010
ISTANBUL - Hürriyet Daily News
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