Mergers promising despite global woes

ISTANBUL - Hürriyet Daily News

The health sector will become a top market for mergers this year, a report says.

Turkey experienced a record high number of mergers and acquisitions (M&A) in 2011, according to a Deloitte report, which predicted foreign investors and equity funds will continue their interest in local companies this year despite the adverse global economic expectations.

The report published by the global advisory company’s local unit showed 241 transactions were conducted in the M&A market last year, creating a total volume of $15 billion. The top 10 largest transactions constituted some 56 percent of the sum while the ones less than $50 million, which made up 83 percent of the total number of transactions, generated only 22 percent of the total value.

This indicates medium size companies took a bigger role in M&A last year, according to Deloitte Turkey. Health, e-trade and education sectors were the leading industries in the local M&A market last year. 
Foreign investors were the leading players, taking a 74 percent share worth of $11.1 billion. Private equity funds inked 46 out of 241 transactions, breaking another record. Funds focused on health, e-trade and food and beverages industries.

Privatizations, which made up half of M&A transactions in 2010, were mostly quiet last year due to troubles in electricity and gas distribution tenders and delays of large size privatization projects, such as toll roads and electricity production.

Deloitte is optimistic on this year’s M&As despite Europe’s financial woes, global economic slowdown and lingering problems of the Turkish economy such as the widening current account deficit, depreciation of the lira and inflation risks, according to Deloitte corporate finance partner Başak Vardar. 
“However, the vivid medium size transactions market, secondary sales, privatization calendar as well as foreign investor and fund interest leads us to remain optimistic for 2012,” she said in a press statement. Activity in medium size transactions will continue, according to the report.