International accounting firm EY Turkey’s Corporate Financing division has published its Merger and Acquisition Transactions Report for 2020. The report revealed a total of 209 transactions valued at an estimated value of USD 9 billion, of which 89 transactions (42.5%) had a disclosed value of USD 6.9 billion (up 155.6% from the USD 2.7 billion figure for 2019), and the remaining 120 transactions (57.5%) were undisclosed but with an estimated value of USD 2.1 billion (down 8.7% from USD 2.3 billion).
Despite a similar total number of transactions in 2020 and 2019, the average value of transactions showed a significant increase in 2020, resulting in the 155.6% increase in disclosed transaction value. However, it should be noted that the USD 2.7 billion of disclosed transactions in 2019 was the lowest transaction value of recent years. In 2020, of the 89 transactions with disclosed values, 2 of them had a value of over USD 1 billion, 11 of them had values between USD 100 million and USD 500 million, and the remaining 76 transactions had values below USD 100 million. This compares with 2019 when there were no transactions in the range of USD 1 billion and only 9 transactions over USD 100 million.
Turkey’s on-going economic recession and the onslaught of the Covid-19 pandemic have been detrimental to the Turkish economy in 2020. However, despite these negative factors, the IMF has forecast the Turkish economy to have grown by 1.2% in 2020. Inflation, unemployment, growing debt, Central Bank reserves, the current account, tourism revenue, and the value of the Turkish lira economic indicators have all attracted much concern in 2020. Despite the improvement in the value of transactions in 2020 compared with 2019, there still remains a low interest by foreign investors in the Turkish economy.