Annual Turkish M&A Review 2017

In the prevailing climate of economic and geopolitical challenges, the M&A market in Turkey demonstrated resilience in 2017 through 298 transactions with a total deal volume of c. US$10.3 billion.

The total annual deal volume, still well below its levels in the first half of the decade, saw a y-o-y increase of c. 41% from its historic dip in 2016. On the other hand, the total deal number reached its all-time high, owing to the significant contribution of the increased venture capital and angel investor activity.

As foreign investors continued to maintain a prudent approach, their total deal number was on the decline; however, they increased their deal volume by c. 45% y-o-y, and made up c. 53% of the total annual deal volume, through a few sizeable deals.

Small and middle market transactions, especially in the abundance of early-stage investments, once again characterized the M&A activity. Transactions with a deal value below US$50 million representing 84% of the total deal number, made up only 15% of the total deal volume. On another note, nearly one third of the total deal volume was generated by the three largest transactions of the year, backed by foreign investors.

Financial investor activity excluding early-stage M&A remained flat by number of deals, but made a record high contribution to the total deal volume (c. 24%) in the scarcity of foreign strategic investors.

The ratio of annual deal volume to GDP over the last decade and in 2017 was 1.7% and 1.2% respectively, as compared to a global average of 4.8% and 4.9%, respectively, indicating the potential of the Turkish market for much higher deal volume than today. Looking ahead, we believe strong fundamentals of the Turkish market will again support the M&A landscape in the coming period.