Deloitte Turkey published the '2018 Merger and Acquisitions Report'. According to the report that reveals the general appearance of mergers and acquisitions in Turkey, despite the negative economic developments experienced in 2018, Turkey Mergers and Acquisitions market showed a better performance than the previous two years. Thanks to a small number of large-scale transactions, and strong trading volume in the first half of the year, 256 transactions in a total amount of $ 12 billion realized in 2018. Although the number of transactions decreased by 13 percent compared to the record number in 2017, the total trading volume increased by 17 percent. In 2018 in which strategic investors and a small number of large-scale transactions came to the forefront, the top ten transactions accounted for 63 percent of the total annual transaction volume.
Large-scale transactions of foreign strategic investors became prominent.
While foreign investors accounted for the transaction corresponding to $ 7.6 billion with 74 transactions, the transaction volume of Turkish investors was realized with an amount of approximately US $ 4.4 billion with 182 transactions. The contribution of foreign and Turkish investors to total annual transaction volume was 63 percent and 37 percent, respectively, while on the other hand, the number of contributions to transactions was realized as 29 percent and 71 percent, respectively. The total trading volume of foreign investors increased for two consecutive years, making the highest contribution to the total annual transaction volume since 2015. Thanks to large-scale transactions such as Denizbank, UN Ro-Ro and Oyak Çimento, which accounted for 66 percent of the total investment made by foreign investors and which its closing and approval process continue, the annual trading volume of foreign investors increased by 38 percent in 2018. In contrast, during this period, Turkish investors focused on their portfolios rather than inorganic growth.
Despite the decrease seen in the number of transactions in recent years, European investors have realized the highest number of transactions among foreign investors and accounted for 49 percent of total foreign investor transactions. North American investors completed the year with 16 transactions, while investors from Asian Pacific and Gulf countries made more limited contributions by 13 and 9 transactions, respectively. In terms of transaction value, investors from the UAE, Denmark and Taiwan came to the forefront, while the investors from the US, Germany, Italy, UK, France and Sweden came first in terms of the number of transactions.
The biggest transaction by financial investors was the acquisition of some of the shares of D.ream International that costs $ 200 million by Temasek Holdings and Metric Capital Partners.
Large-scale transactions dominated transaction volume
The contribution of the top ten transactions to the total transaction volume was the highest since 2012 with 63 percent. The average size of the top ten transactions was about $ 752 million, which was above the 2017 average of $ 510 million. The acquisition of Denizbank, whose closing and approval process is in progress, by Emirates NBD Bank, was the largest transaction representing 27 percent of the annual transaction volume alone.
The UN Ro-Ro investment of DFDS, the Oyak Çimento investment of Taiwan Cement Corporation, Gram Games investment of Zynga and D.ream International investment of Temasek Holding and Metric Capital Partners were among the other prominent transactions of the year signed up by foreign investors. The largest transaction by Turkish investors was the acquisition of Doğan Media Group by Demirören Holding for $ 929 million. In parallel with previous years, small and medium-sized transactions weighed in the total number of transactions. Average transaction value increased by 34 percent compared to the previous year and rose to 47 million dollars. Excluding the top ten transactions, the average transaction size in the remaining transactions was $ 18 million. 221 transactions with a transaction value of less than $ 50 million, representing 86 percent of the total number of transactions, while they represented only 12 percent of the total transaction volume. On the other hand, transactions with a transaction value higher than $ 250 million and correspond only 4% of the total number of transactions, accounted for 63 percent of the total transaction value. In addition, the average size of small-scale venture fund and angel investor transactions, which accounted for 32 percent of the total number of transactions, amounted to $ 600,000.
Internet, mobile services, technology and production attracted interest
As in previous years, internet, mobile services and technology transactions were at the top of the list due to the interest of early financial investors. Despite a slight decline, the number of transactions in these sectors contributed 37 percent to the total annual number of transactions. Production, service, energy, financial services, food and beverage and e-commerce sectors were also remarkable in terms of the number of transactions. Financial services, production, infrastructure, logistics and transportation, media and food and beverage sectors were the main sectors contributing to the transaction volume.