This year has been a busy one for mergers and acquisitions, with U.S. activity hitting a new high. But domestic companies aren’t the only ones getting in on the action in the U.S. It looks like M&As of U.S.-based companies by foreign firms is setting a new record this year as well.
Foreign buyers involved in $440 billion of M&As in the U.S.
S&P Capital IQ’s Global Markets Intelligence division reviewed the locations of buyers this year and in past years and found that more than $440 billion worth of M&As in the U.S. involved foreign acquirers targeting businesses based in the U.S. Senior Director Richard Peterson reports that this beats the past record of $377.4 billion, which was in 2000.
This year about 23% of M&A transactions in the U.S. involved foreign buyers, compared to about 21% in 2000. Here’s a look at the levels of foreign involvement in U.S. M&As and how they have evolved over since 1999:
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Peterson found that so far this year, the Financials sector has had the most M&A activity by foreign buyers at $112.7 billion worth of deals. Hot on that sector’s heels was Healthcare with $111.2 billion worth of deals. The Information technology sector was in a distant third place with $87.6 billion.
Foreign buyers striking huge deals
One of the more recently announced foreign M&A deals is L’Air Liquide S.A.’s proposed acquisition of Airgas, which is based in Pennsylvania. The France-based firm intends to pay $13.4 billion, which would make it the fourth biggest acquisition by a European company in the Materials Sector ever, according to S&P Capital.
While 2015 has already set a new record for foreign M&As, another huge transaction could add significantly to the year to date total. Canadian Pacific Railway (which has been one of Bill Ackman’s top long positions for years) is said to be considering making a bid to acquire Norfolk Southern, which has a market capitalization of more than $26 billion. If a deal actually emerges, it would mark the biggest acquisition of a U.S. company by a Canadian firm in history.
As we head into the last month of the year, Peterson observes that it seems likely we will see $500 billion in foreign M&As of U.S. companies this year.