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ANKARA, Dec 6 (Reuters) - Bank of America Merrill Lynch has withdrawn from bidding to advise Turkish defence contractor Aselsan after Turkey struck a preliminary defence deal with a Chinese firm under U.S. sanctions, an Aselsan official said on Friday.
Turkey, a member of NATO, said in September it had chosen an air and missile defence system built by China Precision Machinery Import and Export Corp (CPMIEC) over rival offers from Franco-Italian Eurosam SAMP/T and U.S. firm Raytheon Co.
Merrill Lynch had made a joint bid with Turkey's Halk Investment to advise Aselsan on a planned secondary listing but has since written to the firm to say it was pulling out, the Aselsan official said, asking not to be named.
"We have received five bids from brokerage houses. One of those was the Halk Investment-Merrill Lynch bid ... Due to the missile deal with China, Merrill Lynch has informed us that they pulled out," the official said.
Merrill Lynch officials in Turkey could not immediately be reached for comment.
U.S. and NATO officials are unhappy with Turkey's choice of CPMIEC, which is under U.S. sanctions for selling items to Iran, Syria or North Korea that are banned under U.S. laws to curb the proliferation of weapons of mass destruction.
Turkey has said the $3.4 billion Chinese deal offered the most competitive terms and would help it achieve its aim of building a stronger domestic defence industry by allowing co-production.
But Turkish officials have made clear the decision is not yet final, keeping their options open by asking CPMIEC and its rivals to extend the validity of their bids.