U.S. businesses led in '92 in foreign acquisitions

March 31, 1993|By Chicago Tribune

CHICAGO -- Although increasing numbers of American businesses are downsizing in an effort to remain competitive in a tough global economy, corporate America still managed to lead the way in cross-border acquisitions in 1992 for the first time since the mid-1980s.

The unexpected bulking-up by U.S. corporations found the French, leaders in foreign acquisitions in 1991, pushed into second place while the Japanese, high fliers in the late 1980s, dropped to No. 5.

According to a survey by the international accounting firm KPMG Peat Marwick, U.S. corporations announced last year they would spend $13.3 billion to buy 342 foreign companies -- up from $8.2 billion and 333 transactions in 1991.

Philip Morris Inc., through its operating company Kraft General Foods International, recorded the biggest deal in 1992 when it acquired the Norwegian food company Freia Marabou for $1.4 billion.

Other mega-deals by American corporations included a $1.2 billion purchase of Argentina's Transport del Sur, a gas-distribution company, by a consortium led by Enron and including Citicorp; Homestake Mining Co.'s $710 million purchase of International Corona Corp., a Canadian gold-mining company; and Gillette Co.'s proposed $650 million acquisition of the United Kingdom's Parker Pen Holdings, maker of several types of writing instruments.

The largest single purchase of an American company by a foreign company was Japan's Asahi Glass Co.'s $1.01 billion acquisition of AFG Industries, a glass-product manufacturer. That was followed by German Siemens Co.'s $550 million purchase of Sylvania Co., maker of lighting equipment; and Belgian Solvay & Cie Co.'s acquisition of Tenneco's Wyoming mineral operation for $500 million.

"Most of the American activity was in Europe," said Lenz Neuhauser, Peat Martwick's national director of mergers and acquisitions.

The rush into Europe was spurred on by what Mr. Neuhauser called the "Europe 1992 syndrome." American companies, convinced that the new economically unified Europe would exclude them if they weren't on the ground with a corporate presence, rushed into the region, snapping up companies at a pace not seen since the 1960s.

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