Aviva becomes latest foreign firm to exit Turkey

International insurance giant Aviva has become the latest foreign company to exit Turkey.

The British firm agreed to sell its 40 percent stake in a joint venture in Turkey for 122 million pounds ($173 million). Ageas Insurance, which has a unit in Turkey, is expected to buy the shares in a deal to close later this year, Reuters reported on Wednesday.

Aviva is choosing to exit Turkey as part of an international restructuring plan, following companies including Citigroup and UniCredit in selling or reducing their stakes. HSBC is considering leaving Turkey if it can find a local buyer, it said early last year.

Foreign companies operating in Turkey’s finance industry have found the business environment more challenging due to losses for the lira against foreign currencies, economic volatility and increasing political interference in the sector. State-run banks and insurers, backed by government capital, have also sought to increase their market share with cheap loans and discounts.

Last year, Volkswagen AG cancelled plans to establish a $1.1 billion factory in Turkey citing the economic impact of the COVID-19 pandemic. It chose to set up a business in Slovakia instead. Volkswagen had suspended the plans in 2019 under public pressure after the Turkish government ordered troops into Syria to battle Kurdish militants allied with the West in the fight against Islamic State (ISIS).