Raise your hand if you think the hottest emerging market for M&A is either India, China or Brazil. Well, if you raised your hand, you're wrong. A Bloomberg analysis found dealmaking in Turkey has grown faster than in any of the other big emerging markets. The value of Turkish buyouts has grown by 59% to $8.8 billion over the past year, while M&A fell in the other three.
Pharma deals are doing their share to boost Turkey's numbers, too. Turkish generics maker Biofarma went on the block earlier this year, as private-equity and venture investors sought to cash out for up to $700 million. Abdi Ibrahim Ilac is also up for sale. Italy's Recordati snapped up Frik Ilac, one of the country's fastest-growing drugmakers, for $130 million. Another Turkish pharma, Bilim Ilac, has attracted buyout interest, but most recently was said to have struck a deal for a 10% stake sale to private-equity investor Actera.
Turkey's fast-growing drug market is also attracting other sorts of pharma expansion. Takeda Pharmaceutical launched a new subsidiary based there, and Eli Lilly ($LLY) is negotiating with Mustafa Nevzat Ilac for either a partnership or a stake sale in an arrangement that would give it access to low-cost manufacturing and regional distribution.
Although there are some indications that Turkish growth may be slowing--at 8.8% last quarter--it has room to make a comeback and remain strong. Investment types in the country say they expect 2012 to be even bigger for local deals. "Both private equity and merger and acquisition guys are seeing Turkey as the next hot spot," Memet Yazici, director of private equity firm Rhea Girisim, told Bloomberg. "I feel like most companies are for sale here."
- read the Bloomberg piece