Turkey’s merger and acquisition volume plunges amid security concerns, economic problems

ISTANBUL

Turkey’s merger and acquisition volume plunged by over half to $7 billion amid security concerns and rising economic problems, according to a new report, which showed that many foreign direct investors have been steering clear of Turkey. 

The Merger and Acquisition Transactions Report by EY showed on Jan. 12 that Turkey’s M&A volume has plummeted to its lowest level since 2009. 

EY Turkey Corporate Financing President Müşfik Cantekinler said the fall in the number of high-volume public transactions and a plunge in the average value of the transactions played a key role in the general declining trend in the M&A volume last year. 

Cantekinler also emphasized the ongoing security concerns both in Turkey and in the neighboring region, as well as existing economic problems, as the main reasons behind the M&A plunge last year. 

“The loss in the value of the Turkish Lira had a significant impact on M&A transactions … Foreign investors do not want to enter into volatile countries,” he said, as quoted by Reuters. 

“We took fairly considerable opportunities to foreign investors but they told us they could not come to Turkey at present,” Cantekinler added. 

 EY Turkey Corporate Financing Senior Director Cem Günfer said foreigners’ transaction volume had plunged to $2.5 billion in 2016 from around $6.6 billion in 2015. 

“In addition to the escalating security concerns, some slowdown in Turkey’s economic growth and the steep fluctuations in the forex rates played a key role in this plunge,” Günfer added, according to a follow-up press release. 

EY executives also noted that it is getting more difficult to secure financing. 

According to the EY report, the energy sector took the lions share in terms of transaction volume in 2016.

The IT sector led the list in terms of the number of transactions. 

Turkey’s M&A transaction volume is estimated to be at around $10 billion in 2017 thanks to an expected rise in deals in the second half, although this figure will be lower than the country’s real potential.