In the last two years the number of investors looking to acquire or become a partner with a company in Turkey has risen so rapidly that the consultants are having difficulty keeping pace with demand. Most say that the number of applications they received doubled in 2006. We asked consultants about the applications they received last year, how many they had worked on seriously and how many had been concluded. When this information is added to the business volume in 2006, the performance of these matchmakers becomes clear.
The words of one of the managers at one of the major firms involved in mergers and acquisitions reveals the very striking boom in demand in this field. “In the last two years there has been a huge demand from investors who want to buy a company in Turkey or become a partner with one. Just a few years ago the number of requests could be counted on the fingers of my two hands. But now the number of requests we have received has exceeded 100. Like us, the other consulting companies are having difficulties keeping pace with demand. We have had problems finding enough suitably trained specialists and lawyers to meet this demand. In fact, there were even talented people who left to set up their own consulting company. There are also new foreign consulting companies entering the market.”
The figures confirm this managers comments… Between 2002 and 2004 the total value of mergers and acquisitions in Turkey was US$4.5 billion. In 2005 the figure reached US$31 billion. In 2006 the total value of such transactions was US$19.5 billion.
The Forecast For 2007 Is US$15 Billion
The largest consulting companies involved in mergers and acquisitions forecast that the total volume of privatization and company sales in Turkey in 2007 will reach US$15 billion.
On a sectoral basis they believe that mergers and takeovers will continue in the energy, finance, real estate, services, tourism, foodstuffs and pharmaceutical sectors in particular. The acquisition of Eczacıbaşı İlaç by the Czech Zentiva and Standart Bank becoming a partner of Dundas Ünlü during the first quarter of 2007 are regarded as an indication that the year will be an active one. Following the important public sector sales and the large-scale bank transactions that occurred in previous years, the players are now changing. Instead of large ticket transactions, 2007 is expected to witness a reduced volume of transactions involving mainly small and medium-sized private companies. For this reason, the number of transactions is expected to rise when compared with previous years.
These forecasts by consultants are confirmed by the increase in the number of companies which have come to them. Executives in companies which act as intermediaries for mergers and acquisitions say that in the last year a large number of foreign and local small and medium-sized companies have applied to them. Some say that there has been an increase of 20 percent in the number of requests they have received, while for others it has been 100 percent.