Mergers and acquisitions hit 7-year high

The size of mergers and acquisitions hit a 7-year high and reached USD 14bn in Turkey in 2021, according to the KPMG Zoom: Mergers and Acquisition Trends- 2021 report, prepared by the British-Dutch professional services network KPMG Turkey. The report also stated that the number of mergers and acquisitions rose in 2021, compared to the previous years. 

On the other hand, the number of transactions, which broke a record in 2021, totaled 390 and the total transaction size surged by 12% to USD 10.1bn in the country, according to Deloitte Turkey’s Mergers and Acquisitions 2021 report. 63% of these transactions were carried out by financial investors. 

The country’s transportation sector came to the fore in the KPMG Turkey’s report. The highest transaction figure in the sector was that the joint venture, which was established by the Turkish airport operator TAV Airports and the German Fraport AG and won a USD 8.21bn tender for the operation of Antalya Airport for 25 years. 

Moreover, e-commerce, technology, internet and mobile services, and gaming sectors were other outstanding industries for investors. Financial investors (private capital, risk capital, wealth funds, etc.), who took the lead in mergers and acquisitions (M&A), carried out 245 transactions totaling USD 4.2bn in 2021. The transactions of the country’s first decacorn Trendyol and one of the first unicorns on-demand grocery delivery service Getir generated 65% of the transaction volume of financial investors. 

Foreigners executed 58% of the total annual M&A transaction volume in the country in 2021, according to Deloitte Turkey’s report. The number of transactions carried out by them rose by 28% and exceeded the 5-year average. The number of acquisitions by foreign investors totaled 86 and the amount hit USD 5.9bn in 2021. 

However, foreign investors carried out 60 M&A transactions in total in 2021, according to the KPMG Turkey report. The figure, which was lower than previous years generated 19% of total transactions in 2021. The total transaction volume of foreigners, which rose to USD 4bn in 2021, fell behind domestic investors with a 28% share in total transaction size. 

“The Turkish market continues to be dynamic as it was last year. The annual transaction size has increased for two successive years following a decline in 2019. Turkey has achieved to be one of the fastest-growing economies after China as of the third quarter of 2021. Within this scope, the Turkish market continues to be an attractive destination with its remarkable growth for foreign investors,” said Deloitte Turkey Partner and Financial Consultancy Lead Kivanc Cidam. 

In the meantime, domestic investors generated 42% of the total annual transaction volume and 78% of the number of transactions. They also come to the fore in nine privatization transactions that totaled USD 660m. 

Venture capital funds and angel investors carried out 217 transactions which amounted to USD 1.9bn and took the largest share with 89% in the total number of financial investor transactions. 

The number of transactions executed by private equity funds remained at the same level but the total value of transactions more than doubled in 2021, as compared to 2020. The total amount hit USD 2.3bn. USD 1.5bn of this figure was generated by Trendyol transactions. Private equity funds also carried out transactions in the manufacturing, technology, energy, e-commerce, and financial services sectors. 

The size of 17 transactions in the e-commerce sector amounted to USD 2.9bn and the figure created 29% of the annual total transaction volume. Technology and internet &mobile services took a 37% share from the total number of transactions and became the most attractive sectors in 2021. 

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