EXPAT CAPITAL

EXPAT CAPITAL

The first stop for foreigners

In white goods it is Arçelik,in retailing Migros,in foodstuffs Ülker and in furniture Boydak...

THOSE WHO RECEIVE A LOT OF CALLS
Their partnership culture means that groups like Sabancı and Koç head the list of holdings whose receive the most visits from foreigners. Other groups with whom foreigners establish contacts with a view to cooperation both in the sectors on which they focus and in other areas include Çalık, Borusan Holding and Eczacıbaşı Holding. On the other hand, their interest in new projects means that Fiba and MV Holding are also frequently visited.
If we look at it on a sectoral basis, the Anadolu Group is a local giant with whom anyone wishing to enter either the soft drinks or the beer market definitely talks. It is the same situation for Zorluteks in home textiles, Ülker in foodstuffs, Lider Faktoring in factoring, Boyner in clothing, and Migros and BIM in organized retailing. In furniture it is the Boydak Group which comes to the fore with its Doğtaş and Nurus Furniture brands.
WHAT ARE THE FOREIGNERS LOOKING FOR?
So what are the reasons behind the interest foreigners show in these companies? Factors such as transparency, institutionalization, a strong capital structure, high profitability, low risk and a readymade infrastructure can be included amongst the “first criteria” for virtually every sector.
Seas Capital Partner CEO Şevket Başev lists what foreigners are looking for as follows: “In sectors which have a future potential, companies with high profit margins and market shares are very important. Foreigners looking to enter the country directly prefer those who constitute a major barrier to the entry of their rivals. In addition, the criteria that foreigners are looking for include the completion of the corporate structure.”
THE FAVOURITES’ COMMON CHARACTERISTICS
Experts say that, regardless of the sector, medium-sized and large companies with growth potential are always on foreigners’ radars. Coming to the common characteristics of these domestic players… Virtually all of them are ranked among the top five in their sectors. In addition, the favourite local companies share common characteristics such as a strong sales network, market share, brand awareness and a readymade infrastructure.
Unicredit Turkey Director Merve Orak lists the local firms’ shared characteristics that attract the interest of foreigners as follows: “The common features of the local companies are as follows: financially strong when compared with their rivals, with healthy relations with Turkish banks, and a high level of institutionalization.”
DO THE SMALLER ONES HAVE A CHANCE?
Experts say that, because foreigners go first to the leading 8-10 players in most sectors, the smaller sized companies generally do not have much chance. But this rule does not apply to every sector. A good example of this is logistics. Logistic’s expert Atilla Yıldıztekin says: “The fact that there is no clear leader plays a part but in logistics they don’t go to the leading five companies. But the very small firms have absolutely no chance. Those which are medium-sized or bigger, have fleets of vehicles, are managed in a professional manner and family companies in which control has passed to the second generation are the ones which are attractive.”
Demet Özdemir, managing partner responsible for corporate finance at Ernst & Young, stresses that in sectors where the competition is between many large and small firms, there may be more interest in small companies. “As examples we can give the foodstuffs, small household appliances, information technology and pharmaceuticals sectors. In some sectors the large local players can exert a lot of pressure. Because they don’t look warmly on sales of shares, they are on the side of the buyers. In such a situation, foreigners turn to the smaller players in the market.”