40 Turkish firms worth $4 bln sold to foreign companies

Forty Turkish-owned businesses with a combined market value of $4 billion have been acquired by foreign businesses in the first four months of 2015, figures reveal, indicating a major retreat from an earlier Turkish bid to acquire troubled rivals in the region.
The Turkish daily Bugandun reported on Monday that the trend of Turkish firms selling subsidiaries as US dollar-denominated debt has surged amidst a decline in the value of the Turkish lira. The liraand’s record decline against the dollar — 16 percent in April alone — saw private sector debt jump to $202 billion, ushering in a wave of foreign investors who sought to acquire or merge with some strategically important Turkish companies, Bugandun reported.
The current trend marks a critical U-turn in Turkish investor tendencies. Pursuing opportunities to reverse Europeand’s debt crisis in the aftermath of the 2008 global financial crisis, most Turkish companies stepped up efforts to seek out and acquire troubled rivals across the continent. Some preferred to buy out or partner with these European companies, rather than enter European markets with their own brands, as part of a strategy to maintain the same European customer base. Recently, however, the hunter has become the game.
In 2011, some economists believed that in the next five years Turkish firms would most likely take part in serious acquisitions abroad. They argued that the Eurozone debt crisis affecting some countries in the EU could cause firms in those countries to be sold at cheaper prices, opening doors for Turkish firms that were planning to expand and invest abroad. Some leading Turkish firms, such as food giant Yildiz, made some key acquisitions in Europe, but the goal of Turkish businesses acquiring cash-strapped firms in surrounding countries and Europe was never fully realized.
h2Firms in key sectors being soldh2 Foreign investors have acquired 40 Turkish companies at a total value of $4 billion since the beginning of 2015, according to Ernst Young Turkeyand’s Corporate Finance President Manduifik Cantekinler. Experts view these developments as an indication that domestic firms are trying to reduce exposure to Turkeyand’s economic woes as much as possible.
and”The fact that domestic firms have to sell off units and shares to cover debt is tragic,and” Bugandun quoted Fatih University International Trade Department President Dr. Osman Nuri Aras as saying. Aras added, and”This is the only route out of the country, and the only way for companies to pay off their debts.and”
The past few weeks alone have seen a dramatic number of foreign acquisitions of key Turkish firms. Yildiz Holding sold its dairy unit, AK Gida, to the French giant Lactalis, while the Qatari Mayhoola Fund acquired 30.7 percent of the Turkish clothing firm Boyner Perakende Yatirim. The Saudi company SEDCO acquired a 19.5 percent stake in the high school chain Mektebim Koleji, with a goal to increase its stake to 50 percent in the next year and a half. Meanwhile, 65 percent of Turkish glassmaker Merve Optik was taken over by the French company Essilor in April.
In 2014, Japanese company Panasonic acquired 90 percent of the electrical switch-maker ViKO, the private equity giant Abraaj Group bought 80 percent of the Turkish diary firm YandOrsan, the Japanese company Ajitomo bought 50 percent of the sauce-maker Kandukrer Gida and the Ferrero bought hazelnut producer Oltan Gida.
and”We predict that toward the last quarter of 2015 there will be more mergers and acquisitions as the political uncertainty clears,and” said the chairman of the investment service firm andunlandu Co, adding that investors from the Far East also have their eyes on Turkish companies.

SOURCE: Today’s Zaman