A New Wave Is Coming

Sectors are facing a significant downturn. According to the structure of the sector, many mergers and acquisitions are expected to occur in the near future. The consolidation process which is starting in the world as a whole is forecast to continue. As Turkey prepares for the second wave of consolidation in many sectors, such as banking, leasing, factoring, retailing, clothing and cement, there will consolidation in sectors such as airlines, personal pensions and energy for the first time.

As the global crisis spreads throughout the world, it is triggering the liquidation of the weak links in many sectors, starting with finance and banking. Sometimes this takes the form of acquisitions, sometimes of mergers and sometimes withdrawing from the market or bankruptcy. Turkey is experiencing its share of this trend. A new wave of consolidation is now expected in many sectors.

New Era In Finance
The first signs of consolidation in the finance sector have begun to be seen in leasing. It shrunk by 35 percent last year as a result of the global crisis. The contraction is forecast to be around 30 percent in 2009. There are 52 companies in the sector but the top 10 players account for 70 percent of the market. At the moment, the consolidation that is currently occurring, and will occur, between foreign banks, is forecast to manifest itself in the shape of change on the Turkish market in the near future.

Contraction Problem In Cement
The cement sector underwent a significant consolidation three years ago when the state-owned factories were privatized. But, even after this process, there are still more than 20 players in the market. Officials say that in order for there to be a healthy competition the number of players needs to be seven at most. There is talk of powerful companies buying up firms which are newly established or whose credit repayments fall due.

Local Love In Retailing
In the Turkish retail sector, which has a total turnover of US$150 billion, the three largest players have a sales volume of a total of US$10 billion. There are very many players in the market. There are nearly 500 foodstuffs and non-foodstuffs brands in organized retailing alone. The consolidation of the sector is expected to continue through the acquisition and merger of local chains.

Nilüfer Gözütok
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