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Is 2024 an “M&A year” for Türkiye?

February 22, 2024

Türkiye’s M&A outlook is driven by a number of factors which may be difficult to forecast. This report mainly summarizes our assumptions on the deal drivers which are expected to encourage investors in Türkiye in 2024, especially in the peaking sectors. Obstacles, on the other hand, play a vital role on deal momentum.

Norton Rose Fulbright and Mergermarket’s recently published annual Global M&A Trends and Risks Report indicates promising early signs of a rebound in global M&A activity. According to the report, with deal appetite rising from industry consolidation to growth of new products and services, coupled with the ongoing pursuit of digital transformation, green shoots of opportunity are emerging. High on the agenda for many dealmakers are AI businesses, while stricter regulatory requirements for antitrust and ESG remain key talking points. While the report examines key developments driving and shaping M&A around the world, we will take a deep dive into the M&A trends that are expected to be seen in the Turkish market.

Main deal drivers for Türkiye

Private equity dry powder

Private equity (“PE”) dry powder is one of the most significant deal drivers in the M&A market, having a direct impact on the M&A market. However, ticket size, as observed, decreases in Türkiye. Reductions in deal value direct PE’s to either mid-size or co-investments.

Although PE deal value and volume have decreased globally due to uncertainties in the markets, increasing the cost of financing and geopolitical risk in comparison to previous years, PE’s demand in Türkiye are expected to liven up in 2024. As per S&P’s 2024 Global Outlook report, PE dry powder increased to a remarkable $US2.59 trillion globally at the end of 2023. As it is hard to find big-ticket deals on the Turkish market, co-investment opportunities are being sought. Venture capital deals have been very popular, which revive the market as well.

Environmental, social and governance (ESG) guidelines

The constant evolution of the legal and regulatory landscape on ESG issues is having a critical effect on the investment strategies of investors, especially in emerging markets such as Türkiye, where investors are increasingly prioritizing ESG practices.

As the importance of maintaining strong ESG policies continues to grow, investors will want to expand their portfolios by shifting their investments to sustainable practices and ESG-sensitive standards to improve their valuation, uphold their market reputation and meet investor and stakeholder demands. Similarly, exits are expected in sectors whose operations contradict sound ESG practice and values.

Strength of foreign currency against the Turkish lira

While devaluation of the Turkish lira against foreign currencies attracts investors, foreign currency- denominated raw material indebtedness creates high risk for Turkish companies. Rapid fluctuations in Turkish lira decrease the inflow of foreign investments and has a remarkable impact on investment appetite in Türkiye.

Owing to the post-pandemic crisis, fluctuations in Turkish lira and the upcoming municipal elections in Türkiye, an increase in the distressed M&As in 2024 may be expected as well.

Supply chain disruption

Disruption of supply chains is an emerging issue caused by regulatory control policies and regulatory obstacles at the national level in certain territories. Especially in Europe, there is a high inclination to select suppliers from territories in closer proximity, due to supply chain disruption incidents around the world. Therefore, to ensure easier access to the resources and stability in terms of supply chains, vertical acquisitions and strategic partnerships are expected to increase in 2024.

Considering its geographical location, we may expect to see an increase demand for Turkish suppliers, placing Türkiye in a more preferred position, particularly for European companies. Türkiye’s attempts to achieve the net-zero targets set by the European Union also serve as an important motivation to increase and sustain its commercial relationship with the EU.

Peaking sectors


Being in the era of digital transformation, technology businesses, especially those using AI-infused technologies, are expected to be in high-demand in 2024 and beyond. An increasing need for digital transformation will create opportunities in the technology sector in terms of M&A deals as acquisitions may be used as a tool to keep up with the digital transformation industry.

Renewable energy

Investors’ interest in the energy transition still remains strong. Considering the increase of ESG scrutiny and government inclination toward greener economies, the importance of renewable sources will continue in 2024. A considerable demand in investing in the renewable energy sector is expected in 2024.

Life sciences and healthcare

Especially after the pandemic, the healthcare sector is being driven by aging populations and a focus on upgrading healthcare systems. Pursuant to the Norton Rose Fulbright and Mergermarket’s annual Global M&A Trends and Risks Report, healthcare systems are among the first three peaking sectors.

The main obstacle: Financing

Uncertainty in Europe

Europe is considered to be facing tough economic conditions due to financial uncertainties and high rates of inflation. This will have an adverse effect on financing for M&A deals. Considering the volume of European investment in Türkiye, the Turkish M&A market will also be affected by this uncertainty.

Private debt/cash reserves

Provision of loans by private companies rather than financial institutions is on the rise due to speed and easier access. According to the Global M&A Trends and Risks Report, private debt and cash reserves will be the most commonly used forms of financing over the next 12 months. Similarly, cash reserves are also expected to be preferred during dealmaking.

Leveraged buyouts as a traditional financing method, especially by PEs, have been in decline in recent years due to challenges in securing financing and rising costs, both globally and locally.

Other deal obstacles


Strict regulations by the Turkish government regarding payment in or indexed to foreign currency (Decree No:32), restricting the use of cash commercial loans, create adverse effects on investments in the Turkish markets. The restriction on using foreign currency is a crucial factor for investors aiming for sustainable earnings before interest, taxes, depreciation and amortization (EBITDA) values.

In addition to currency-related regulations, considering the expected increase in the ESG-related scrutiny, developments in ESG-related legislations, especially in Europe, may also be considered as one of the main obstacles to the Turkish M&A sector in 2024.

Representation and warranties

Agreement on representations and warranties as a risk management mechanism, plays a vital role in M&A transactions. Tendency of investors to avoid any risk as much as possible lengthens and occasionally breaks the process. Warranty & Indemnity (W&I) insurance, on the other hand, is becoming an alternative tool to overcome long discussions on representations and warranties and guarantee the past risks of businesses. However, this mechanism is still not very common from a sell-side (mostly family-owned) business and is mainly preferred by PEs.