Foreigners Snap Up U.S. Businesses

Outlays by foreign direct investors to acquire or establish U.S. businesses increased sharply in 2007 after also increasing strongly in 2006, according to the U.S. Bureau of Economic Analysis. Outlays reached $276.8 billion in 2007, the second largest recorded and the highest since 2000, when new investment outlays peaked at $335.6 billion.

As in previous years, most outlays by foreign direct investors were to acquire existing U.S. businesses. These outlays totaled $255 billion, compared with $21.9 billion to establish new U.S. businesses.

The total value of all foreign-owned assets in the U.S. at the end of 2007 was nearly $20.1 trillion. In comparison, the total of U.S.- owned assets abroad was $17.6 trillion.

U.S. businesses that were newly acquired or established by foreign direct investors employed 487,600 people, more than double the 223,400 people employed by businesses that were newly acquired or established in 2006.

Outlays increased most substantially in manufacturing, which accounted for nearly half of total investment outlays in 2007.

Outlays by investors from most major geographic areas increased. Overall, the outlays from Europe accounted for more than half of the worldwide total.

Source: Bureau of Economic Analysis, www.bea.gov.