Energy Deals 2009

Mergers and acquisition activity within the Turkish energy market

Energy Deals* 2009 Annual Review reviews the M&A activity in the Turkish energy sector occuring in 2009. The report analyses the underlying drivers and examines the rationale behind the overall trends and the key individual deals.

It is hardly surprising that M&A activity has fallen back from its peak in 2008 and, despite the same deal activity in terms of deal numbers, the total deal value in the Turkish energy market contracted by 67% y-o-y to US$1.7bn. Now, what is vital to understand is whether this is merely a repercussion of the ongoing credit crunch and regulatory uncertainties or whether more fundamental shifts in M&A strategy can be expected to occur as the credit markets recover.

Looking ahead, it is true that the transaction values in 2009 are graying the short-to-medium-term picture. However, the composition of the utilities in the privatisation basket, including the big tickets in the gas distribution, electricity distribution and electricity generation sectors, keeps expectations high about a more exciting deal environment in 2010. On the other hand, this should not be taken as blind hope, as we remain cautious given the warnings echoed everywhere about the growing threat of fresh global asset bubbles: what matters is not the realisation of tenders but the seamless closing of transactions. With this in mind, we hope to see the ongoing regulatory challenges and financial problems ironed out and translated into record-breaking deal values in 2010.

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