2019 was a bad year for mergers and acquisitions

I keep myself regularly updated with the total number Mergers and Acquisitions per year in Turkey. It looks like I don’t need an in-depth analysis to say 2019 was a bad year for these two activities. But let’s not allow the low figures to make us depressed because there are some interesting despite the negative events in 2019.

According to a report by Deloitte, mergers and acquisitions hit their lowest level in 2019 following the 2008 financial crisis: around USD 5.3 billion with 233 transactions. The number of transactions declined by almost 10% compared to the previous year while total volume of transactions shrunk by more than 50%. However, numerous start-up investments by Venture Capital Funds and Angel Investors helped the economy a lot, leading to some happy developments even in a year with nearly zero performance. Venture Capital Funds and Angel Investors have mostly invested money in technology, internet and mobile services, followed by e-trade, food and beverages, and energy sector.

Billion dollar transactions that we used to see a lot over the last year has sadly not taken place this year. The largest investments of the year were: USD 688.5 million by China Merchants Group for the Third Bridge and Northern Marmara, USD 405.2 million dollar by Mayhoola for Investments (Qatar) for Boyner Retail, USD 402.6 million by Koç Holding for Yapı Kredi Bank; USD 247 million by Eaton Capital (Ireland) for Ulusoy Elektrik, USD 247 million by Nippon Paint (Japan) for Betek Boya.

“Europeans rank higher in total number of transactions but…”

The same report shows that the contribution of foreign investors to total number of transactions reached 64%, way above the average number of transactions over the last 10 years, despite the fact that total number of transactions by foreign investors, which hits rock bottom since 2009, has declined by 55% on a yearly basis. Although domestic investors rank higher in total number of transactions, foreign investors showed a better performance in terms of total transaction volume with a total of 71 transactions vis-à-vis 163 domestic investments.

Out of 71 transactions by foreign investors, European investors seem to take the first place while the fact that 6 investments from Asia Pacific and 12 investments from the Gulf Countries is equivalent to 50% of total investment volume by foreign investors does not go unnoticed either.

Though I admit that 2019 was a bad year in terms of mergers and acquisitions, many investments concluded without most people noticing shows that Turkey remains a centre of attraction for foreign investors.