Mergers hit record-high due to foreign investors

ISTANBUL - Anatolia News Agency

TÜSİAD Chairwoman Ümit Boyner says foreign investors are most active in Turkey’s heatth and e-commerce sectors.

Chairwoman of the Turkish Industrialist’s and Businessmen’s Association (TÜSİAD), Ümit Boyner said Turkey had broken its Mergers and Acquisitions (M&A) record in 2011, speaking yesterday at a seminar titled “M&A in Turkey: What kind of business partnerships are necessary to be come competitive?”

“Last year a total of 241 M&A agreements worth $15 billion broke the country’s record. Foreign investors, who signed 138 deals, made up 74 percent of this figure,” Boyner said, noting that the flexibility of Turkish firms and their ease in adapting to different work cultures allowed them to take better advantage of investment opportunities in the region. She added that in order for Turkey to achieve sustainable social and economic growth, the country’s economy needs to grow by 5-6 percent per year.

Health and e-commerce

Boyner said that foreign investors were most active in Turkey’s health and e-commerce sectors, followed by the food and beverage, telecommunications, logistics, financial services and manufacturing sectors. “Many of our local firms boosted their strategic growth strategies by including global labels under their umbrellas,” she said.

Turkey’s new incentive scheme is a strategic move to boost Turkey’s economic reform process, Boyner said, adding that she believes sustainable growth and fostering a competitive environment are as critical, if not more so, than macro-economic reforms. She also noted that the incentive scheme would facilitate more M&A activity.

Meanwhile, Istanbul Stock Exchange President İbrahim Turhan, who also spoke at the seminar yesterday, said that firms should take advantage of the capital markets when making large mergers and acquisitions especially with regard to accessing liquidity post acquisition.

He also stressed that one-fourth of those involved in M&A activity in Turkey were foreign investors and only one-third were domestic investors.

Turhan stressed that the most pressing problem facing domestic investors was the increase in consumer spending, which was threatening the country’s savings rate.

“As a result our total domestic savings as a percentage of GDP has dropped to around 12-13 percent. This is not structurally sustainable,” added Turhan.