Turkish Companies Draw Bulk of Its Investment from US

Featured Turkish Companies Draw Bulk of Its Investment from US

Looking at the foreign investor map of Turkish companies by region, American investors stand out, having invested in 161 Turkish companies through merger and acquisition transactions in the pharmaceutical and energy industries in the last decade. The greatest interest in Turkish companies abroad has been shown by American investors over the past 10 years. According to data compiled by Ernst & Young, an independent company offering audit, consultancy, corporate financing and tax services, American investors have invested in 161 Turkish companies over the past decade. Also, many foreign companies entered the Turkish market through mergers and acquisitions, transfers of enterprises or privatizations in the same period.

As far as the number of transactions goes, the U.S. was named the country with the largest amount of investments in Turkish companies.

Since 2007, a total of 161 American companies have come to the table with Turkish companies to enter the local market for $6.7 billion.

The greatest transaction from U.S. companies in this period was Goldman Sach's partnership worth $1.3 billion with Turkish energy company SOCAR in 2015.

The second largest transaction was investment firm Kohlberg Kravis Roberts (KKR) merge with the U.N. Ro-Ro transportation company for $1.284 billion in 2007, while Amgen biotechnology company's partnership with Mustafa Nevzat Pharmaceuticals for $700 million in 2012 was named the third-largest transaction.

Germany ranks second with 111 transactions

Germany and the U.K. followed the U.S. in terms of transactions. Germany ranked second with 111 transactions, the total volume of which amounted to $6.6 billion in this period.

The largest three transactions actualized by German companies were the transfer of the operational rights of Antalya Airport for $3.197 billion, the acquisition of Yapı Kredi Sigorta insurance company for $913 million and the takeover of yemeksepeti.com, a popular online food-ordering company, for $589 million.

Meanwhile, British companies conducted 106 transactions with a total volume of $9.5 billion with the largest three transactions being Diageo PLC's, an alcoholic beverage company, acquisition of the Mey İçki beverage company for $2.1 billion, the merging of SABMiller brewing and beverage company with Anadolu Efes for $1.9 billion and the privatization of Tekel Sigorta insurance company for $1.72 billion.

Other companies with the largest number of transactions was France with 73, the Netherlands with 49, Japan with 47, Italy with 43, Austria and the United Arab Emirates with 31, respectively, and Switzerland with 26 transactions.

The largest transactions carried out by companies from these countries in Turkey were the French Aéroports de Paris' takeover of TAV Airports Holdings for $874 million in 2012, Dutch ING Bank's acquisition of Oyak Bank for $2.7 billion in 2007, Japanese Panasonic's purchase of Viko for $460 million in 2013 and Italian Recordati's acquisition of Dr. F. Frik İlaç pharmaceutical company for $130 million in 2011.

Austrian oil and gas company OMV's acquisition of Petrol Ofisi for $1.4 billion, the UAE Abraaj's acquisition of Acıbadem Health Services for $443 million and Swiss Julius Baer Holding's acquisition of Private Şafak Hospitals for $60 billion were named the greatest investments coming from these countries.

Largest acquisitions in banking sector

Considering the mergers and acquisitions in the past 10 years in terms of transaction value, the largest investment in Turkey came from Spanish companies.

As a result of 23 transactions, the Spanish invested $9.7 billion in Turkish companies over the past decade, the biggest of which was Banco Bilbao Vizcaya Argentaria's (BBVA) partnership with Garanti Bank for $5.8 billion in 2010.

BBVA invested a total of $9.2 billion in Turkey by purchasing Garanti Bank's shares in 2014 and 2017.

In terms of the size of transaction value, Spain was followed by the U.K. with $9.5 billion, the U.S. with $6.7 billion, Germany with $6.7 billion, Russia with $6.3 billion, the Netherlands with $6.1 billion, Qatar with $3.8 billion, Azerbaijan with $2.9 billion, France with $2.6 billion and Malaysia with $2.4 billion.

Diageo PLC's acquisition of Mey İçki for $2.1 billion was named the greatest transaction by British companies in this period, while Goldman Sachs' partnership with SOCAR Turkey for $1.3 billion was named the biggest transaction by a U.S. corporation.

Also, Fraport and IC Holding's takeover of the operational rights of Antalya Airport for $3.2 billion was recorded as the largest transaction by Germany. Sberbank's acquisition of DenizBank for $3.8 billion, ING Bank's takeover of Oyak Bank for $2.7 billion, Qatar National Bank's purchase of Finansbank for $2.9 billion, Socar-Turcas-Injas consortium's acquisition of Petkim for $2 billion, Aéroports de Paris' purchase of TAV Airports Holding for $874 million and IHH and Khazanah Nasional Berhad's acquisition of Acıbadem for $1.3 billion were named the largest investments from Russia, the Netherlands, Qatar, Azerbaijan, France and Malaysia, respectively.

U.S. stands out among countries with most M&As in Turkey

Müşfik Cantekinler, head of Ernst & Young's Corporate Financing Department told Anadolu Agency that the U.S. has come to the fore among countries conducting the most merger and acquisition (M&A) transactions in Turkey over the past 10 years.

Pointing out that EU countries have considerable weight in the sector as well, Cantekinler noted that there has also been a significant increase in the number of investments coming from Far Eastern and Middle Eastern countries in the recent period.

He stated that one of the most important reasons for the increase in investments from these regions is the desire of investors to access European markets by means of Turkey's geographical position.

According to Cantekinler, another noteworthy point is the decline in the interest of foreign investors in privatizations in recent years, which had a negative impact on transaction volume.

"We predict that investments from EU member states may continue on similar levels while investments from the Far East, the Middle East and Latin America may continue to increase in the upcoming period," Cantekinler added. AA

Last modified onMonday, 17 July 2017 05:14