Selçuk Bayraktar, left, and Recep Tayyip Erdogan

Erdogan’s Son-in-law Buys Italian Aerospace Company to Bypass Embargo

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By Levent Kenez

STOCKHOLM (Nordic Monitor) — The Turkish firm Baykar, a defense contractor owned by the son-in-law of Turkish President Recep Tayyip Erdogan, Selçuk Bayraktar, signed a preliminary agreement to acquire Italy’s Piaggio Aerospace on January 27, marking a significant step in its international expansion. The deal, approved by Italy’s Ministry of Enterprises and Made in Italy in December 2024, involves the transfer of Piaggio Aero Industries and Piaggio Aviation’s business operations to Baykar. Pending additional approvals, including from the Italian Council of Ministers, the transaction is expected to conclude by spring.

According to an analysis by Turkey’s state-run Anadolu news agency, Baykar’s acquisition of Piaggio Aerospace represents a strategic response to long-standing trade and export barriers faced by Turkey in the defense sector. Unlike conventional industries, the defense industry requires navigating complex regulatory frameworks and diplomatic relationships, often influenced by geopolitical considerations.

Anadolu reported that Turkey has frequently encountered embargoes which restrict the export of its defense products, even when such products are developed domestically. One significant hurdle has been the insistence of some countries on local manufacturing as a precondition for procurement. By acquiring an EU-based company like Piaggio Aerospace, Baykar aims to bypass these restrictions. Defense products manufactured in Italy can be more readily integrated into European markets, eliminating legal and logistical obstacles tied to non-EU imports.

This acquisition also aligns with Turkey’s broader strategy of overcoming embargoes through domestic innovation and international partnerships. While Turkey has successfully built a self-sufficient defense industry, this deal allows Baykar to complement its production capabilities with improved access to European customers.

Nordic Monitor previously reported that Erdogan tied the Turkish parliament’s approval of Sweden’s NATO membership to Canada lifting its arms embargo on Turkey. Speaking to pro-government journalists during his return trip from Hungary on December 19, 2023, Erdogan said US President Joe Biden had suggested resolving congressional reluctance to sell F-16 fighter jets to Turkey in exchange for Sweden’s NATO accession. However, Erdogan added another condition: the removal of Canada’s restrictions on defense-related exports to Turkey, including crucial optical equipment used by Baykar.

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The Canadian government had imposed an arms embargo on Turkey in 2021 following the use of Turkish-made military drones in the 2020 conflict between Azerbaijan and Armenia in the Nagorno-Karabakh region. The embargo included the WESCAM MX-15D EO/IR FLIR system, a critical component for Baykar’s Bayraktar TB2 drones. Bayraktar had previously claimed that they no longer needed these Canadian products. However, Baykar had resorted to methods such as having the required components supplied by the country purchasing the drones and assembling them locally in order to circumvent the embargoes.

The Turkish government has long claimed that restrictions and sanctions imposed by NATO allies, particularly the United States and Germany, on Turkey’s arms purchases have hindered the country’s ability to meet the alliance’s defense spending target. During a press conference on July 8, 2023, ahead of the NATO summit in Vilnius, President Erdogan expressed frustration with these embargoes, saying they were preventing Turkey from meeting the 2 percent defense spending goal. Erdogan pointed out that Turkey’s defense spending had decreased from 2 percent in 2019 to around 1.30 percent since some NATO allies were imposing restrictions.

Bayraktar recently appeared on Forbes’ latest billionaire list, one of the 27 Turkish billionaires who made it onto the prestigious list. Bayraktar’s net worth stands at $1.2 billion, securing him the 2,465th spot on the list. His brother, Haluk, who serves as CEO of Baykar, follows closely behind, ranking 2,619th with a net worth of $1.1 billion.

Established by their father Özdemir Bayraktar in 1984 to manufacture parts for the Turkish automotive industry, Baykar has seen significant growth. In 2022 the company recorded sales of $1.4 billion, and by 2023, its exports had soared to $1.8 billion, primarily driven by contracts secured with various militaries across Europe, Africa and the Middle East.

Baykar’s drones have been exported to over 30 countries and were used in conflicts in Nagorno-Karabakh between Armenian and Azerbaijani forces in 2020 as well as in Libya and Ukraine. Many credit the company’s success to the support of President Erdogan, who often promotes Baykar drones during his diplomatic visits abroad, resulting in multimillion-dollar agreements.

Selçuk Bayraktar has been married to Erdogan’s daughter, Sümeyye, since 2016.

There is a strong public belief that the rapid increase in the wealth of the Bayraktar brothers and their attaining billionaire status at such a young age was greatly influenced by their familial ties to Erdogan. However, according to pro-government groups, Selçuk Bayraktar is regarded as a national hero.

He said on a television program in 2022 that Turkey’s drone and unmanned aircraft projects would fail if there were no political backing, putting his support behind the current government before elections in 2023.

 

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