Acquiring a Turkish Company: 2025 Risk Factors and Strategic Considerations
Market Dynamics and Opportunity Landscape
The merger and acquisition (M&A) market in Türkiye experienced remarkable growth in 2025. Announced transaction volume reached 8.2 billion USD, marking an increase of more than 50% compared to 2024. When accounting for undisclosed deals, the total estimated transaction volume for 2025 stands at around 18.5 billion USD. This pattern mirrors the global market trend, where total M&A value reached 4.5 trillion USD—a surge of more than 50% worldwide.
Average deal size rose from 21 million USD to 32 million USD, signaling that investors are targeting larger-scale, stable, and predictable cash-flow assets with relatively lower risk exposure.
Investor Composition: Domestic and Foreign Divergence
In 2025, Türkiye’s M&A market demonstrated two distinct investor dynamics:
| Investor Type | Number of Deals | Market Share (by number) | Volume | Market Share (by volume) |
|---|---|---|---|---|
| Domestic investors | 470+ | Over 80% | 4.8 billion USD | 59% |
| Foreign investors | Fewer | Below 20% | 3.4 billion USD | 41% |
Domestic investors dominated by deal count, yet foreign investors led in average deal size, showing that international buyers are primarily focused on large-scale strategic acquisitions and consolidation opportunities.
Key Risk Factors
1. Credit Market and Financial Pressure
Industrial companies in Türkiye faced significant credit constraints in 2025. As a result, buyers must carefully examine target firms’ debt levels, balance sheet health, and financial flexibility. Elevated capital costs put pressure on asset valuations and created financial distress for several firms.
2. Political and Geopolitical Risks
According to research by Ernst & Young (EY), more than half of surveyed companies reported that political risks negatively impacted their sales and revenues. In the Turkish context:
- Domestic political uncertainty has affected foreign investor confidence
- Potential early elections in 2026 may influence economic outlook
- Regional tensions and geopolitical volatility complicate operational planning
3. Compliance and Corruption Risk
Türkiye’s Corruption Perception Index score declined to 31 in 2025. This underlines the importance of robust corporate governance, certification of compliance frameworks, and comprehensive third-party risk assessments.
4. Cybersecurity and Data Privacy
Cybersecurity and data protection emerged as the top sources of corporate disputes in 2025. Turkish data protection compliance—regulated under KVKK (Personal Data Protection Law)—requires thorough technological and operational audits to ensure compliance and minimize future legal exposure.
Sector Landscape and Focus Areas
Retail and Services
Approximately 40% of 2025 deal volume was concentrated in the retail sector. The most substantial transactions included:
- Vehicle inspection stations (TURKA): 1.72 billion USD, acquired by an international consortium
- Logistics and supply chain: Ceva Logistics acquired Borusan Supply Chain Solutions for 383.2 million USD
- Tourism infrastructure: Fenerbahçe Kalamış Marina—504 million USD—and other marina operations
Energy Sector
Apollo Global Management acquired a 3% share in the TANAP Project for 1 billion USD, and TÜMAD Mining’s purchase of Doğu Biga Mining for 470 million USD reflected a wave of consolidation in energy and natural resources.
Healthcare, Pharmaceuticals, and Technology
- Healthcare: Turkven sold its 11% stake in Medical Park to FOM Group for 173.4 million USD
- Technology and entrepreneurship: 23 transactions occurred in gaming, software, artificial intelligence, cybersecurity, and defense technology fields
Common Mistakes and Failures
1. Insufficient Due Diligence
Despite the average deal size reaching 32 million USD, buyers must independently verify financial data of target firms—especially those under credit strain. Balance sheet strength, hidden liabilities, and government-backed financing conditions should be carefully reviewed.
2. Underestimating Integration Complexity
The contrast between domestic investors’ smaller deals and foreign investors’ large-scale deals emphasizes that integration complexity increases proportionally with transaction size. Challenges often stem from differences in corporate culture, HR practices, and administrative structures.
3. Misjudging Macroeconomic Conditions
High capital costs and tight credit conditions in 2025 significantly increased post-acquisition financing expenses. Additionally, tight monetary policy and inflation normalization negatively influenced cash flow projections.
4. Misinterpreting Political and Regulatory Framework
Political uncertainty led to frequent tax adjustments, currency volatility, and regulatory shifts. Contracts with public entities—such as licenses and public offerings—should be assessed through strategic scenario planning.
Strategic Recommendations for a Successful Acquisition
Valuation Approach
High capital costs and financial pressure have reduced the viability of aggressively priced acquisitions. Earnings projections should be realistically adjusted according to the pace of macroeconomic normalization.
Sector Selection
Strong deal activity in retail, logistics, energy, and healthcare confirms these sectors’ consolidation and scalability potential. Meanwhile, Türkiye’s technology and entrepreneurship ecosystem continues to demonstrate promising regional growth opportunities.
Investor Composition Analysis
Domestic investors typically target small and mid-sized deals, while foreign investors prefer large-scale acquisitions. Therefore, establishing an appropriate partnership structure aligned with operational complexity and financial capability is crucial.
Compliance and Post-Acquisition Risk Management
Post-acquisition integration must prioritize cybersecurity, data protection, corporate governance, and anti-corruption controls. Allocating financial and legal resources in these areas in advance significantly enhances long-term deal success.
Conclusion
The 2025 M&A landscape in Türkiye presents both opportunity and risk. While growth potential remains substantial, success depends on strategic preparation, prudent valuation, and comprehensive risk mitigation. Entrepreneurs and investors considering market entry should combine financial discipline with a deep understanding of Türkiye’s political, regulatory, and economic dynamics.