News Release

FOR WIRE TRANSMISSION: 10:00 JUNE 6, 2001
BEA 01-16*

Foreign Investors' Spending to Acquire or Establish U.S. Businesses, 2000




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Ned Howenstine (202) 606-9845                          BEA 01-16

   Foreign Direct Investors' Spending to Acquire or Establish
        U.S. Businesses Increased to $321 Billion in 2000


   Foreign direct investors' spending to acquire or establish
U.S. businesses increased 17 percent to $320.9 billion in 2000,
according to preliminary estimates by the U.S. Bureau of Economic
Analysis.  Spending increased 28 percent to $275.0 billion in
1999 after more than tripling in 1998.

   The unprecedented levels of new investment spending in the
last 3 years have coincided with soaring worldwide merger and
acquisition activity and with strong growth of the U.S. economy,
particularly when compared with that of many of the other major
industrialized countries.  In these three years, foreign direct
investors' spending was boosted by a number of especially large
acquisitions   These new investments tended to be in industries
in which large companies predominate, industries such as
petroleum, motor vehicles, food manufacturing,
telecommunications, and financial services.  In both the
telecommunications and financial services industries,
deregulation and rapid technological change during the latter
half of the 1990's increased incentives for business
consolidations.

   Investors from Europe accounted for 75 percent of total
investment spending during 1998-2000; up from 64 percent in 1995-
97.  Spending by British investors, which accounted for over a
third of total investment spending, was more than three times
larger than spending by Netherlands investors, who spent the
second largest amount.

Outlays in 2000

   By industry, outlays in 2000 increased sharply in
manufacturing (to $144.9 billion from $73.1 billion in 1999) and
in professional, scientific, and technical services (to $32.0
billion from $9.4 billion).  Within manufacturing, the largest
increases were in food, petroleum, and computers and electronic
products.  Outlays decreased in information services, but at
$62.2 billion, they remained substantial.  Within information,
outlays were largest in broadcasting and telecommunications and
in information and data processing services.

   By country of ultimate beneficial owner (UBO), outlays by
investors from Canada, Europe, and Asia and Pacific increased.
In Europe, most of the increase was accounted for by investors
from the Netherlands, Switzerland, and "Other Europe,"
particularly Spain, Finland, and Belgium.  Although spending by
British investors was almost the same as in 1999, at $107.7
billion, it was much larger than that by investors from any other
country.  Spending by investors from the Netherlands, at $47.9
billion, ranked second.  In Asia and Pacific, about three-fourths
of the increase in outlays was accounted for by investors from
Japan; investors from Singapore also contributed to the increase.


Employment of the newly acquired or established businesses

   U.S. businesses that were newly acquired or established by
foreign investors in 2000 employed 646,000 people.  The employees
were largely accounted for by businesses in manufacturing
(particularly computers and electronic products, food, and
petroleum), in "other industries" (particularly employment
services and investigation and security services), in
professional, scientific, and technical services (particularly
advertising and related services), and in retail trade.

   The 1999 estimate of total outlays has been revised down 3
percent from the preliminary estimate published last year.

                      *        *        *
   Estimates in this report are based upon a Bureau of Economic
Analysis survey that covers (1) existing U.S. business
enterprises in which foreign investors acquired, either directly
or through their U.S. affiliates, at least a 10-percent ownership
interest and (2) new U.S. business enterprises established by
foreign investors or their U.S. affiliates, also using the 10-
percent ownership interest threshold.

   Additional details on the new investments by foreign
investors in 2000 will appear in the June issue of the Survey of
Current Business, the monthly journal of the Bureau of Economic
Analysis.

                      *        *        *
   BEA's major national, international, regional, and industry
estimates; the Survey of Current Business; and BEA news releases
are available without charge on BEA's Web site:

                      <www.bea.doc.gov>

   STAT-USA maintains an Internet site that contains BEA
estimates, the Survey of Current Business, and BEA news releases.
For information about STAT-USA, go to <www.stat-usa.gov>, or call
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$175.00 for 1 year.  Summary BEA estimates are available on
recorded messages at the time of public release at the following
telephone numbers:

                (202)  606-5306   Gross domestic product
                       606-5303   Personal income and outlays
                       606-5362   U.S. international transactions

   Most of BEA's estimates and analyses appear in the Survey of
Current Business, BEA's monthly journal. Subscriptions and single
copies of the printed Survey are for sale by the Superintendent
of Documents, U.S. Government Printing Office.  Internet:
<bookstore.gpo.gov>; phone: 202-512-1800; fax: 202-512-2250;
mail:  Stop SSOP, Washington, DC 20402-0001.




    Table 1.--Investment Outlays, 1992-2000
-----------------------------------
         Year          Outlays
                      (millions)
                     of dollars)
-----------------------------------
         1992           15,333
         1993           26,229
         1994           45,626
         1995           57,195
         1996           79,929
         1997           69,708
         1998          215,256
         1999r         274,956
         2000p         320,858
-----------------------------------
    p Preliminary.
    r Revised.

    Source: U.S. Bureau of Economic Analysis



                          Table 2.--Distribution of Investment Outlays by Size, 1992-2000
                                                                     [Percent]
    -----------------------------------------------------------------------------------------------
                                            1992   1993   1994  1995  1996  1997  1998  1999r 2000p
    -----------------------------------------------------------------------------------------------
    Total outlays........................... 100    100    100   100   100   100   100    100   100
    $5 billion or more .....................   0      0      0   (D)     0     0    55     55    48
    $2 billion - $4.999 billion ............   0    (D)     27    18    29    12    11     16    20
    $100 million - $1.999 billion ..........  42     51     51    48    55    67    27     24    28
    Less than $100 million .................  58    (D)     22   (D)    16    21     7      5     4
    -----------------------------------------------------------------------------------------------
    D  Suppressed to avoid disclosure of data of individual companies.
    p  Preliminary.
    r  Revised.

    Source:  U.S. Bureau of Economic Analysis



                    Table 3.--Investment Outlays by Industry of U.S. Business Enterprise, 1998-2000
                                          [Millions of dollars]
    -----------------------------------------------------------------------------------------------------
                                                                               1998      1999r     2000p
    -----------------------------------------------------------------------------------------------------
    All industries .........................................................  215,256   274,956   320,858

    Manufacturing ..........................................................  149,243    73,122   144,871
      Food .................................................................    1,286       859       (D)
      Beverages and tobacco products........................................      442     1,417     4,121
      Petroleum and coal products...........................................   67,658       158       (D)
      Chemicals  ...........................................................    3,627     5,703    14,060
      Plastics and rubber products..........................................    1,434     3,682     2,540
      Nonmetallic mineral products..........................................      900     3,175     6,539
      Primary metals........................................................    2,454     2,542       321
      Fabricated metal products.............................................      532     1,388       467
      Machinery ............................................................    5,220    13,941     1,048
      Computers and electronic products ....................................   17,861    30,601    43,945
      Electrical equipment, appliances, and components .....................      136     4,247     8,287
      Transportation equipment .............................................   37,177     2,786     2,700
      Other ................................................................   10,516     2,667     6,643
    Wholesale trade ........................................................    3,321       (D)     7,486
    Retail trade ...........................................................    1,153     3,458       (D)
    Information ............................................................   13,399    90,855    62,198
      Publishing industries ................................................    9,856       (D)     9,387
      Motion pictures and sound recording industries .......................       36       (D)       (D)
      Broadcasting and telecommunications ..................................    2,841         0       (D)
      Information services and data processing services ....................      667       (D)    12,502
    Depository institutions ................................................    1,563       (D)       (D)
    Finance (except depository institutions) and insurance .................   21,057    46,380    44,117
    Real estate and rental and leasing .....................................    6,299     5,206     3,197
    Professional, scientific, and technical services .......................    4,289     9,366    31,999
    Other industries .......................................................   14,932    32,680    23,283
    -----------------------------------------------------------------------------------------------------
    D   Suppressed to avoid disclosure of data of individual companies.
    p   Preliminary.
    r   Revised.

    Source:  U.S. Bureau of Economic Analysis



                 Table 4.--Investment Outlays by Country of Ultimate Beneficial Owner,
                                       1998-2000 /1/
                                  [Millions of dollars]
    -------------------------------------------------------------------------------------------
                                                                1998         1999r       2000p
    -------------------------------------------------------------------------------------------
    All countries .........................................     215,256     274,956     320,858

    Canada ................................................      22,635       9,271      27,536
    Europe ................................................     170,173     196,288     244,705
      France ..............................................      14,493      23,750      26,508
      Germany .............................................      39,873      21,514      16,887
      Netherlands .........................................      19,009      22,265      47,909
      Switzerland .........................................       4,525       7,512      22,485
      United Kingdom ......................................      84,995     109,226     107,666
      Other Europe ........................................       7,278      12,021      23,250
    Latin America and Other Western Hemisphere ..........        11,354      33,046      13,072
      South and Central America ...........................         920       1,622         (D)
      Other Western Hemisphere ............................      10,433      31,424         (D)
    Africa ................................................         212         (D)         (D)
    Middle East ...........................................       2,810         848         (D)
    Asia and Pacific ......................................       7,329      15,100      33,278
      Australia ...........................................         (D)         (D)         (D)
      Japan ...............................................       4,862      11,696      25,343
      Other Asia and Pacific ..............................         (D)         (D)         (D)
    United States /2/ .....................................         743         (D)         (D)
    -------------------------------------------------------------------------------------------
    D Suppressed to avoid disclosure of data of individual companies.
    p Preliminary.
    r Revised.
    1. For investments in which more than one investor participated, each investor and
    each investor's outlays are classified by country of each ultimate beneficial owner.
    2. The United States is shown as the country of ultimate beneficial owner for
    businesses newly acquired or established by foreign investors that are, in turn,
    ultimately owned by persons located in the United States.

    Source:  U.S. Bureau of Economic Analysis



                      Table 5.--Selected Operating Data of U.S. Businesses Acquired or Established, by Industry of U.S. Business Enterprise, 1999-2000
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  1999r                                                  2000p
                                                                            -----------------------------------------------------  -----------------------------------------------------
                                                                                 Millions of dollars       Thousands     Number       Millions of dollars         Thousands     Number
                                                                            -----------------------------     of           of      --------------------------         of          of
                                                                              Total     Sales      Net     employees    hectares    Total     Sales      Net      employees    hectares
                                                                              assets              income                of land     assets             income                  of land
                                                                                                                         owned/1/                                               owned/1/
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
          All industries..................................................   454,012    124,253     895       602.7     582,642    446,838    142,315    7,454       645.5     310,301

    Manufacturing.........................................................    73,715     42,219    -912       210.4      92,156    143,857     57,515    3,724       173.2     207,939
    Wholesale trade.......................................................     4,098     11,886    -229        45.2       1,089      6,163     12,579      239        27.2         570
    Retail trade..........................................................     5,807     10,099     -23        55.5         (D)      6,831      8,508      -62        69.5         (D)
    Information...........................................................    40,257     12,276     221        47.2          50     41,235     13,063     -345        47.7       1,392
    Depository institutions...............................................   111,205        (D)      20           J         235     11,506        (D)      (D)           G         (D)
    Finance (except depository institutions) and insurance................   164,780     13,448   2,309        29.5       1,239    175,930     19,337    2,307        41.9         116
    Real estate and rental and leasing....................................     6,604        (D)      67           I       4,401      4,741        (D)      (D)           G       4,506
    Professional, scientific, and technical services......................     3,273      2,196    -194        15.4         (D)     30,351      9,738      628        70.8         (D)
    Other industries......................................................    44,272     20,310    -362       179.5     482,066     26,224     19,967      790       210.9      95,088
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    D Suppressed to avoid disclosure of data of individual companies.
    p Preliminary.
    r Revised.
    1.  One hectare equals 2.471 acres.  Thus, for all industries, the number of acres of land owned in 1999 and 2000 were 1,439,708 and 766,754, respectively.
    NOTES.--For newly acquired businesses, data cover the most recently completed financial reporting year.  For newly established businesses, data are
    projections for the first full year of operations. Size ranges are given in employment cells that are suppressed.  The size ranges are:  A--1 to 499; F--500
    to 999; G--1,000 to 2,499; H--2,500 to 4,999;  I--5,000 to 9,999; J--10,000 to 24,999; K--25,000 to 49,999; L--50,000 to 99,999; M--100,000 or more.

    Source:  U.S. Bureau of Economic Analysis