BACKSTORY - In Turkey, Western Companies Find Stability and Growth

Yeni Raki, a brand of a traditional Turkish alcoholic beverage produced by Mey Içki, a spirits company that was bought by Diageo in August.
DECEMBER 22, 2011

by Mark Scott

LONDON - In Turkey, Western Companies Find Stability and Growth

LONDON — Turkey’s split personality has often left it caught between two worlds. Some European nations have vocally opposed the country’s attempts to build closer ties with the West. And many of its Middle Eastern neighbors have been wary of the avidly secular state.

Now, the country’s identity is an advantage for deal makers. Turkey doesn’t have the economic baggage of its European neighbors, which are dealing with the sovereign debt crisis. With a relatively stable government, it has also angled for a more prominent role in the Middle East, as countries like Syria and Libya continue to face turmoil.

The combination of economic growth and political stability has attracted cash-rich companies looking to make acquisitions. So far this year, deal volume has totaled $10.6 billion, ahead of European countries like Austria, Portugal and the Czech Republic. In 2010, mergers and acquisitions reached $25.6 billion, up from $1.1 billion a decade ago.

“The economic backdrop in Turkey is better than in other European economies and has been rebounding faster,” Emre Yildirim, an executive director at JPMorgan Chase who focuses on Turkish mergers and acquisitions. “It’s a large country that’s growing quickly, so it makes strategic sense for companies to take a look.”

The country’s rapid growth has been a critical factor for foreign buyers. Turkey’s gross domestic product is on track to increase by 8 percent this year.

FULL STORY
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