Outbound M&A

Turkish investors’ appetite for cross-border investment opportunities has led companies to take bolder steps in the last couple of years. Main drivers for Turkish outbound M&A activity were revenue growth, acquisition of new distribution/sales channels and new facilities, geographical diversification and cost efficiencies.

2014 had been a ground-breaking year for Turkish companies’ outbound M&A activity which had resulted in an all-time highest deal value of c. US$6.5 billion (including estimates for undisclosed values). Together with 2015, Turkish outbound M&A activity created a total deal volume of c. US$10.0 billion (including estimates for undisclosed values) through 76 transactions over a two year span.

Manufacturing, infrastructure, energy, real estate and internet & mobile services were the most targeted sectors by Turkish companies and together hosted 53% of the total deal numbers in 2014 and 2015 combined.

In the same period, Turkish investors continued to widen their geographic range by closing deals in Japan, Australia and Colombia. Once more, Europe has been the most preferred investment destination for Turkish companies, representing more than half of the total deal number, while North America took the second place and CIS countries coming in third.

Similar to previous years, Turkish investors mostly acquired either full ownership or a controlling stake in foreign targets.

Outbound investments and international expansion have been emerging as a new major agenda item in the strategic plans of Turkish companies. Many companies with different scales are now considering acquisitions both in developed and emerging markets with growth, diversification or cost efficiency ambitions.