The stake that was privatised comprised the PA's shareholding of 46.12% and a 3.17% stake owned by the Development Bank of Turkey (TKB). RIAG acted as sell-side advisor jointly with Turkish investment bank EFG and local lawyers Tekinalp Avukatlik. RIAG won the sell-side advisory mandate for Erdemir in October 2004 in competition with large renowned investment banks such as Merrill Lynch, HSBC, Citibank, Société Générale and others.
In a public auction on October 4, 2005, OYAK, the Turkish Army Pension Fund, was chosen as the winning bidder for the 49.29% stake in Erdemir for a purchase price of $2.9bn, equivalent to a market capitalisation of approximately $6.0bn. Before the auction the market capitalisation stood at around $3.5bn. Erdemir's privatisation received a lot of interest from steel sector majors such as Mittal Steel, Arcelor, Severstal, POSCO, NLMK and many other strategic investors. Out of almost 40 initially interested parties, 19 prequalified for the second round out of which 6 investors delivered bids and took part in the auction.
The transaction was the largest steel privatisation worldwide in 2005 as well as RIAG's biggest deal ever. It confirms RIAG's position as a leading advisor in the steel sector and should lead to further opportunities in Turkey's emerging economy.