By Robert Weisman of The Boston Globe
BOSTON: European, Asian and Canadian companies are taking advantage of the weaker dollar to buy their U.S. counterparts at a record pace, increasing investment in the United States but also raising fears about a potential loss of jobs and autonomy.
"We could be looking at the world's largest tag sale if we continue to see declines in the dollar," said Donald Klepper-Smith, chief economist at DataCore Partners.
In the latest large deal aided by a weak dollar, Commerce Bancorp, which is based in Cherry Hill, New Jersey, agreed Tuesday to be acquired by Toronto-Dominion Bank of Canada in a cash-and-shares deal valued at $8.5 billion.
Nationally, the value of purchases of companies by non-U.S. buyers so far this year totaled $257.4 billion - more than in any full year since 2000, the height of the technology boom, according to Thomson Financial, a research firm in New York.
The buyouts are sparking anxiety in the United States, though their impact is complex. Foreign owners typically use acquisitions as an entry into the U.S. market and thus may be more willing than American buyers to invest in their new holdings, some economists say. But the risk is that they might also be quicker to cut back or consolidate U.S. operations when times get tough.
"Quite naturally, foreign companies want to play in this market," said Alan Tonelson, a research fellow at the U.S. Business and Industry Council, a trade group for small and midsize manufacturers. "They want leading-edge technology, and the United States is still the technology leader. But when they buy these companies, they're acquiring control over the most dynamic pieces of the American economy, and they're acquiring control over America's future."
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