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Turkish M&A May Decline as Prices Outstrip Peers, Unlu Says

February 12, 2013

Turkish mergers and acquisitions may decline this year because the country’s assets are more expensive than European peers, according to Unlu & Co., which aims to advise on $1 billion of deals in 2013.

Mahmut Unlu, the main shareholder of the investment bank and asset-management firm, predicts deals targeting Turkey at between $25 billion and $30 billion this year, compared with as much as $33 billion in 2012. The figures include an estimated $10 billion of government sales in 2013, down from $14 billion last year, he said at a news conference in Istanbul today.

The country has drawn international companies including Diageo Plc, OAO Sberbank, E.ON SE, SABMiller Plc, Amgen Inc. (AMGN:US) and Aeroports de Paris in the past two years. Turkey’s economy is expected to grow between 4.5 percent and 5 percent this year, helping to attract buyers, Unlu said.

“Turkish assets are becoming more expensive,” he said. “Ebitda multiples on Turkish assets are on average 25 percent to 30 percent higher than those of European peers.''

Companies are generally valued at a multiple of their earnings before interest, tax, depreciation and amortization, or Ebitda. European consumer companies are valued at an Ebitda multiple of between 8 and 10, while similar Turkish assets are valued at between 12 and 15, Unlu said.

Potential Targets

CarrefourSa, a supermarket joint venture between Carrefour SA and Haci Omer Sabanci Holding AS, Migros Ticaret AS, another retailer owned by BC Partners Ltd., and Finansbank AS, a lender owned by National Bank of Greece, are among potential targets for whole or partial acquisitions this year, Unlu said.

A secondary offering of 26 percent of state lender Turkiye Vakiflar Bankasi AO, 6.7 percent of the country’s biggest phone company Turk Telekomunikasyon AS and a 25 percent initial public offering of state lender TC Ziraat Bankasi AS are expected this year, he said.

Unlu aims to advise on share sales valued from $500 million this year. It also plans to advise on deals between $500 million and $700 million in project finance, acquisition finance and bond sales in the domestic market, following $380 million last year, Unlu said.

‘‘We expect an increase this year over last year in IPOs,’’ he said. ‘‘We expect secondary offerings to dominate the market in the first half of the year and initial public offerings in the second.’’

The Istanbul-based firm was formed last year when Unlu increased his stake in the brokerage unit Standard Unlu to 75 percent from 22 percent by buying shares from South Africa’s Standard Bank Group Ltd.

Non-Performing Loans

Istanbul Varlik Grubu, Unlu’s unit that manages as much as 300 million liras of non-performing loans bought from banks, aims to raise its share in the NPL management market to 25 percent this year from 10 percent in 2012, Unlu said.

Unlu Private Equity, a buyout firm owned by Unlu & Co., will complete the first closing of its $400 million fund in April or May for acquisitions in Turkey, Unlu said.

Deloitte & Touche LLP said Jan. 3 it expected about $26 billion of deals this year in Turkey after $28 billion last year. Ernst & Young LLP said deals targeting Turkish assets will reach $25 billion in 2013 after $23.2 billion last year.

To contact the reporter on this story: Ercan Ersoy in Istanbul at

To contact the editor responsible for this story: Benedikt Kammel at

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Companies Mentioned

  • AMGN
    (Amgen Inc)
    • $159.73 USD
    • -0.08
    • -0.05%
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