Expert Spotlight: Strategy is becoming the defining factor in Türkiye's M&A market

For dealmakers watching Türkiye from afar, the headlines can often obscure the opportunity. High interest rates, inflationary pressures, geopolitical uncertainty, and complex financing conditions have undoubtedly made transactions more challenging. Yet despite those headwinds, Türkiye remains one of the region's most compelling M&A markets, particularly for strategic and cross-border investors willing to take a longer-term view.

At our recent event in Istanbul, İsmail Esin, Özge İlhan Acar, Mehmet S. Sezgin joined Cansu Önder to explore how Türkiye's deal landscape is evolving. Their discussion highlighted a notable shift in market dynamics: while transaction volumes have softened globally, activity in Türkiye is increasingly being driven by strategic objectives, operational value creation, and carefully targeted acquisitions rather than financial engineering alone.

For M&A professionals, that evolution may be one of the market's most important developments.

Cross-border investors remain a critical source of activity

Cross-border M&A continues to be one of the market's defining themes. While international investors are applying greater scrutiny and undertaking deeper diligence than in previous cycles, interest in Turkish assets remains resilient.

Türkiye's position at the crossroads of Europe, the Middle East, and Asia continues to provide a compelling strategic proposition. But geography is not the only driver. For many investors, the opportunity lies in access to high-quality businesses that combine attractive valuations with long-term growth potential.

The focus has also become more selective. Rather than pursuing broad sector themes, investors are increasingly seeking businesses with strong management teams, robust fundamentals, and the ability to perform through economic uncertainty. In a more volatile environment, company quality matters more than sector classification.

That shift reflects a broader trend across international dealmaking. Capital is not disappearing; it is becoming more discriminating.

Strategic buyers are shaping the market

One of the clearest developments in Türkiye's M&A landscape is the growing influence of corporate acquirers.

As economic conditions have made organic growth harder to achieve, acquisitions are increasingly being used as tools for transformation rather than just expansion. Strategic buyers are looking to accelerate capability building, enter adjacent markets, strengthen supply chains, and respond more quickly to changing customer demands.

The result is a more dynamic approach to portfolio management. Businesses can acquire, divest, and reposition assets at a pace that would be difficult to match through organic investment alone. M&A has become less about scale for its own sake and more about strategic adaptation.

This mirrors developments seen across mature deal markets globally, where transactions are increasingly being used to reshape business models and enhance resilience rather than simply boost revenues.

Higher capital costs are changing the rules of engagement

Financing remains one of the market's most significant challenges.

Elevated interest rates continue to affect valuations, investor returns and buyer appetite, often widening the gap between buyer and seller expectations. The result is a more measured deal environment, with longer negotiation periods and more disciplined transaction processes.

Cross-border transactions face an additional layer of complexity. International investors frequently require deeper analysis of inflationary pressures, financing structures, and local operating conditions before committing capital, extending timelines further.

But difficult financing conditions have not fundamentally altered the investment case for strong assets. Periods of economic volatility have long been a feature of Türkiye's business environment, and experienced investors recognize that quality companies continue to attract strategic interest across market cycles.

There are also early signs that international capital is becoming more attentive to opportunities in the market. As valuations reset and competition for assets remains relatively contained, investors who previously stood on the sidelines are reassessing potential opportunities.

AI is becoming an essential dealmaking tool

AI is beginning to influence almost every stage of the M&A process, although its impact is proving more practical than disruptive.

The greatest gains are emerging in areas such as due diligence, deal sourcing, financial analysis, contract review, and valuation support. By automating labor-intensive tasks and processing larger volumes of information, AI enables advisors and investors to identify opportunities and risks more efficiently.

The technology is also expanding the universe of potential buyers and targets. Access to broader datasets and more sophisticated analytical tools makes it easier to surface opportunities that may previously have remained hidden.

At the same time, the growing use of AI reinforces the importance of governance. Data security, confidentiality and oversight remain critical considerations, particularly in transaction environments where sensitive commercial information is being analyzed at scale.

The enduring importance of human judgment

For all the discussion around technology, financing and market conditions, the fundamentals of successful dealmaking remain unchanged.

Transactions are still built on trust, judgement, negotiation, and relationships. Technology may improve efficiency and financing conditions may influence market activity, but neither replaces the human factors that determine whether a deal is ultimately completed and creates value.

That is particularly true in a market such as Türkiye, where investors must navigate both complexity and opportunity. Understanding local dynamics, assessing risk, and building confidence among stakeholders remain central to successful outcomes.

The long-term drivers of M&A remain firmly intact. Strategic transformation, cross-border investment, technological change, and the search for growth continue to create opportunities for buyers prepared to look beyond short-term uncertainty.

In that respect, Türkiye offers a reminder of a broader truth in dealmaking: the most attractive opportunities often emerge when investors are willing to take a longer view.

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