Cross-Border M&A Outlook Q1 2026: Opportunities and Risks for Turkish Investors

The US mergers and acquisitions market enters 2026 with cautious optimism. After a period of elevated interest rates that suppressed deal activity, the financing environment has improved, strategic buyers are active, and Turkish companies with US growth ambitions have meaningful opportunities to pursue acquisitions. However, the regulatory landscape — particularly CFIUS review of foreign acquisitions — demands careful navigation.

Several macroeconomic factors shape the M&A environment for Turkish investors:

Favorable conditions:

• Interest rate stabilization has improved leveraged buyout economics
• Valuation multiples in certain sectors have compressed from 2021–2022 peaks
• Strategic rationale for US market entry remains compelling for Turkish industrials, technology, and consumer companies
• The US-Turkey bilateral investment relationship continues to deepen

Headwinds:

• CFIUS scrutiny of foreign acquisitions remains at historically elevated levels
• Antitrust enforcement continues to be active, particularly in technology and healthcare
• Geopolitical considerations affect certain sectors and deal structures
• Currency dynamics between the Turkish lira and US dollar affect deal economics

Mid-market US software companies — particularly those serving industrial, logistics, and supply chain verticals — represent attractive targets for Turkish technology companies seeking to expand their US customer base. Valuations have normalized from the 2021 peak, and strategic buyers can often outcompete financial sponsors on price when synergies are clear.

CFIUS consideration: Software companies with government contracts or access to sensitive personal data require careful CFIUS analysis. Turkish acquirers should conduct a CFIUS risk assessment before signing any letter of intent.

Turkish industrial companies with established US distribution relationships are well-positioned to acquire US manufacturing assets. The reshoring trend has increased the strategic value of US manufacturing capacity, and Turkish companies with complementary product lines can create genuine synergies.

Key due diligence areas: Environmental liabilities, union contracts, pension obligations, and supply chain concentration.

Accounting, engineering, and consulting firms represent lower-CFIUS-risk acquisition targets. Turkish professional services firms expanding into the US market can accelerate growth through acquisition of established practices with existing client relationships.

Turkish investors have historically been active in US real estate. In 2026, opportunities exist in:

• Distressed commercial real estate, particularly office-to-residential conversions
• Hospitality assets in secondary markets
• Industrial and logistics properties benefiting from e-commerce growth

The Committee on Foreign Investment in the United States (CFIUS) reviews foreign acquisitions of US businesses for national security implications. For Turkish acquirers, CFIUS considerations include:

Mandatory filing triggers:

• Acquisition of a TID US business (Technology, Infrastructure, or Data) by a foreign person
• Certain investments in critical technology companies
• Investments giving foreign persons access to sensitive personal data of US citizens

Voluntary filing considerations:

• Even when not mandatory, voluntary CFIUS filings provide certainty and prevent post-closing review
• Turkish acquirers in sensitive sectors should strongly consider voluntary filings
• The CFIUS review timeline (30-day initial review, 45-day investigation) must be factored into deal timelines

Mitigation measures: CFIUS increasingly approves transactions subject to mitigation agreements (National Security Agreements or Letters of Assurance) that impose ongoing compliance obligations. Turkish acquirers should model the operational impact of potential mitigation requirements.

Turkish acquirers must choose between acquiring the stock of a US target (acquiring all assets and liabilities) or specific assets. Key considerations:

• Tax: Asset acquisitions generally provide a stepped-up tax basis; stock acquisitions do not
• Liability: Asset acquisitions can limit exposure to unknown liabilities
• Contracts: Many contracts require consent to assignment in asset deals
• Employees: Asset deals require new employment agreements; stock deals maintain existing employment relationships

In uncertain valuation environments, earnout provisions — where a portion of the purchase price is contingent on post-closing performance — can bridge valuation gaps. Turkish acquirers should negotiate clear earnout metrics, accounting standards, and dispute resolution mechanisms.

R&W insurance has become standard in US M&A transactions. It allows sellers to make clean exits while providing buyers with recourse against unknown liabilities. Turkish acquirers unfamiliar with R&W insurance should understand its role in US deal dynamics.

For Turkish companies acquiring US targets, due diligence should prioritize:

1. Legal and regulatory compliance: Federal and state regulatory compliance, pending litigation, and government contracts
2. Tax: Federal, state, and local tax compliance; transfer pricing; tax attributes
3. Employment: Classification of workers, benefits obligations, non-compete enforceability
4. Intellectual property: Ownership, freedom to operate, open source compliance
5. Cybersecurity: Data security practices, breach history, compliance with state privacy laws
6. Environmental: Site contamination, permits, and ongoing compliance obligations

Successful M&A outcomes depend as much on integration as on deal terms. Turkish acquirers should plan for:

• Cultural integration between Turkish parent and US target management
• Retention of key US employees through equity incentives and employment agreements
• Systems integration timelines that minimize operational disruption
• Communication strategies for US customers and suppliers

Our M&A attorneys advise Turkish companies through every stage of US acquisitions — from target identification and preliminary CFIUS assessment through due diligence, negotiation, signing, regulatory clearance, and closing. We bring deep experience in Turkish-American cross-border transactions and understand the specific considerations that affect Turkish acquirers in the US market.

This article is for informational purposes only and does not constitute legal advice. M&A transactions are complex and fact-specific; please consult qualified counsel before proceeding with any transaction.