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Foreign Acquisitions in U.S. Reach Record High

Just as the level of announced U.S. merger and acquisition activity in 2015 has reached record highs, so too has the dollar amount of foreign acquisition of U.S. targets and businesses.

A review of the location of deal buyers and investors for past M&A activity conducted by the Global Markets Intelligence (GMI) research unit of S&P Capital IQ finds that over $440 billion in transactions involve foreign buyers targeting U.S. businesses.

That surpasses the previous annual record of $377.4 billion set in 2000 when foreigner purchases accounted for almost 22% of that year’s deal proceeds. In terms of sectors, financials find the most foreign buyer activity of date in 2015 with $112.7 billion in deals followed by $111.2 billion from healthcare transactions and $87.6 billion in information technology.

Most recently, France’s L’Air Liquide S.A. announced plans to purchase Pennsylvania-based Airgas, Inc. in a transaction valued at $13.4 billion. That deal ranks as the fourth largest ever European acquisition in the U.S. materials sector.

Meanwhile, there’s at least one big rumored deals, if it comes about, will add to the already record levels of foreign M&A buying in the U.S.

According to published reports, Canadian Pacific Railway Limited (TSX:CP) is exploring a potential acquisition of Norfolk Southern Corporation (NYSE:NSC). With a market capitalization of over $26 billion, a Canadian Pacific Railway deal for Norfolk Southern would be the largest ever Canadian acquisition of a U.S. company. In sum, with over a month remaining in the year it is not unreasonable to see foreign M&A in the U.S. hit the $500 billion mark in 2015.

Foreign Acquisitions in the US

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