Despite an intense political agenda, parliamentary and presidential elections, crisis in the financial markets and increasing energy costs, 2007 was a very active year for the M&A market in Turkey. The total deal value of 135 deals out of 182 realized transactions, amounted to USD 25.5 bn. Taking into account undisclosed transactions; total M&A volume for 2007 is estimated at USD 26.7 bn.
Local investors were much more active in M&A transactions. Their share increased to 34% of all deals in 2007 from only 9% in 2006.
Despite the intense activity in the M&A market, there has been a decrease in the number of transactions by private equity funds. While there were 26 such deals in 2006 it was only 13 in 2007.
Airport operation deals were the most active in area in 2007 with a total deal value of USD 6.7 bn. The largest deals in this sector were the transfer of operation rights of Istanbul Sabiha Gökçen and Antalya Airports with transaction values of USD 3.1 bn and USD 3.2 bn respectively.
As was the case in 2006, the financial services sector also had a very active year in 2007 with total M&A volume of USD 6.3 bn. The largest deal was ING’s acquisition of Oyakbank for USD 2.7 bn. Another important transaction was NCB-Turkiye Katılım Bankası deal with a value of USD 1.08 bn. Only 6 out of 31 transactions in the sector were related to banks, the rest were transactions in insurance, leasing, financial intermediaries and factoring.
Two important transactions in insurance were Garanti Sigorta - Eureko with a transaction value of USD 488 m and Genel Sigorta - Mapfre with USD 375 m.
The largest petrochemical plant Petkim’s privatization is also an important deal to mention. Petkim was acquired by Socar-Turcas-Injaz consortium at a value of USD 2.04 bn, following a competitive tender process where Raiffeisen Investment acted as sell side advisor to the Privatisation Administration.
In 2008, the M&A market continues with a high level of activity both in private deals in the retail, energy, and food sectors and with privatizations. Major projects such as electricity distribution and transport infrastructure privatizations are beginning to bear results. Raiffeisen Investment is once again involved in privatizations as a sell side advisor; out of the 18 electricity distributions to be privatized by the end of 2009, 2 have already been tendered with USD 1.225 bn and USD 600 m transaction values to Sabancı Holding-Verbund and Akenerji-CEZ consortia respectively.
