Türkiye sees record number of M&A deals in 11 months

Türkiye saw a record level of mergers and acquisitions (M&A) from January through November with 486 deals realized according to a report by auditing firm KPMG on Tuesday.

The value of disclosed mergers and acquisitions in 11 months reached the volume of $2.7 billion, according to KPMG Türkiye, while the total amount including those undisclosed was estimated at $7.3 billion.

According to the “Merger and Acquisition Trends 2023 from KPMG Perspective” report, it is estimated that the total transaction volume, including transactions of undisclosed value, rose by approximately $1 billion compared to the same period last year.

Last year’s report by the same firm indicated the total volume of disclosed transactions stood at $5.3 billion, while together with undisclosed ones it stood at $6.5 billion.

Meanwhile, despite the decrease in the transaction volumes as of the end of November 2023, considering the transactions whose values were announced in Türkiye, 2023 was a record year in terms of the number of deals with 486 mergers and acquisitions realized in the same period. Some 205 deals were realized last year, as per the report.

While the report maintains optimistic expectations for 2024, an increase in the number and volume of transactions is expected along with the interest in the technology, media and telecommunications, energy and industrial production sectors.

The report also indicated the absence of transactions surpassing the $1 billion level mark in the first 11-month period. The limelight, however, fell upon the energy and industrial production, and automotive sectors, both of which with four out of the initial 10 transactions took center stage.

Automobile maker Tofaş’s acquisition of Stellantis distribution company in Türkiye, Stellantis Otomotiv Pazarlama A.Ş. was the biggest transaction of 2023 with an announced value of $439.1 million.

According to the report, in terms of other major transactions in the industrial production and automotive sectors, U.K.-based Volex’s acquisition of all of Murat Kablo’s shares for $195.8 million was noteworthy, while U.S.-based Univar Solutions’ acquisition of all of Kale Kimya’s shares for $143.6 million indicated the continuity of strategic investor appetite for Türkiye.

In the energy sector this year, Tatarstan-based PJSC Tatneft acquired 100% of the shares of Doğan Holding-owned Aytemiz, an oil firm, for $336 million.

Vitol Group’s subsidiary Petrol Ofisi bought a stake in BP’s fuel operations in Türkiye.

Moreover, private lender Işbank’s acquisition in the field of renewable energy – by purchasing 50% shares of Greeneco Enerji Elektrik Üretim with a transaction price of $130.9 million stood out among other noteworthy transactions.

In terms of the number of transactions, the sectors of technology, media and telecommunications ranked first with 228 transactions, followed by industrial production and automotive with 58. In terms of transaction volume the industrial production, automotive and energy sectors stood shoulder-to-shoulder with a transaction volume of $1 billion each.

This January-November, the United States and the United Kingdom were the countries investing the most in Türkiye.

The top three countries were the U.S. with 18 transactions, the U.K. with 15 and Germany with 10, followed by the United Arab Emirates with six and Spain with four transactions.

Foreign investors had a share of $1.2 billion in mergers and acquisitions with 94 transactions.

Özge Ilhan, KPMG Türkiye M&A Services Leader pointed out in Tuesday’s press release that investors’ risk appetite decreased significantly in a year marked by inflation struggles and wars worldwide, which impacted mergers and acquisitions. “On the other hand, strategic investors made important acquisitions in Türkiye this year, especially in the energy, industrial production and automotive sectors,” she said.

Stating that the predictable monetary and exchange rate policies expected to be maintained in the country are expected to be an important positive indicator on the investor side this year, Ilhan noted that the escalation of geopolitical tensions and the bipolar world environment it causes are considered downside risks.