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Turkey a bright spot in region of turmoil 27 décembre 2011

Posted by Acturca in Economy / Economie, EU / UE, Middle East / Moyen Orient, Turkey / Turquie, Turkey-EU / Turquie-UE.
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International Herald Tribune (USA) Tuesday, December 27, 2011, p. 16

By Mark Scott, 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 does not 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 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, more than in European countries like Austria, the Czech Republic and Portugal. 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, » said 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 8 percent this year.

It also has a growing middle class, an attractive characteristic to Western consumer product companies. The local population totals about 73 million, almost as many as the largest European economy, Germany. And Turkish G.D.P. per capita has more than doubled in the past decade, to $10,094, according to the World Bank

Turkey is hardly immune to the usual growing pains associated with emerging markets. Inflation hovers near 10 percent, affecting the country’s overall competitiveness. Reliance on debt-ridden Europe may also start to pinch. About 50 percent of Turkish exports are bought by countries in the European Union, according to the Organization for Economic Cooperation and Development, an association of free-market democracies based in Paris.

Still, Turkey « remains one of the good performers, » said Rauf Gonenc, chief economist for Turkey at the organization. While growth is expected to slip to 3 percent next year, the country outpaces its European counterparts, many of which are heading for recession in 2012.

From a deal-making perspective, the region’s troubles may help encourage activity, notably in the financial services sector. Over the past decade, European banks, including the National Bank of Greece and UniCredit of Italy, acquired local institutions as part of their debt-fueled expansion. Now, many European banks, which are facing losses linked to their sovereign bond exposure, want to sell assets outside their local markets to meet new capital requirements.

One target could be DenizBank, the Turkish subsidiary of Dexia, the French-Belgian bank that received a $5.4 billion government bailout in October. As part of Dexia’s nationalization, the European bank has agreed to be broken up. Analysts say a number of relatively strong international players, including HSBC of Britain, are considering the Turkish operations.

« International banks may look to make disposals and sell profitable Turkish assets as part of their global deleveraging, » said Mr. Yildirim of JPMorgan.

Foreign companies are also trying to capitalize on the growing consumer demand.

This year, the alcohol producer Diageo started moving to expand into emerging markets, aiming to increase its revenue from such economies 50 percent by 2015. Turkey was at the top of the list. Each year, about one million people reach the country’s legal drinking age. And despite the country’s large Muslim population, the local authorities have encouraged foreign investment, said Andrew Morgan, president of European operations at Diageo.

« Turkey has attractive G.D.P growth, is politically stable and has a big population, » Mr. Morgan said. « It’s a very important market for us. »

In August, Diageo bought Mey Icki, the largest spirits company in Turkey, from TPG Capital, the private equity firm, for $2.1 billion. The local business has about an 80 percent market share in the local spirit Raki. It also operates about 50,000 outlets across Turkey that Diageo now uses to sell its international brands, like Johnnie Walker whiskey and Smirnoff vodka.

Other Western companies also are tapping into the local consumer market. In November, the brewer SABMiller agreed to buy a 24 percent stake in Anadolu Efes, a Turkish beverage company, in a deal worth $1.9 billion. To take advantage of rising domestic and international energy prices, Vallares, a British investment firm founded by Tony Hayward, the former chief executive of BP, bought Genel Energy, a Turkish oil and natural gas exploration company, for $2.1 billion.

Turkey’s renewed push to privatize state-owned industries has attracted international attention, too. As it has liberalized over the past 20 years, politicians have sold to the private sector stakes in much of Turkey’s energy and telecommunications industries. To reduce the financial burden on state coffers further, other government-backed businesses, like Turkish Airlines, which is 49 percent owned by the state, could soon be up for sale.

« Privatizations will include infrastructure, financial and energy assets, » said Richard Evans, a partner at the law firm Allen & Overy, which opened an office in Istanbul in December to capitalize on the growing mergers and acquisitions activity.

« Right now, Turkey is a much more attractive place to do business than Greece or Spain, » Mr. Evans said.

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