Japan’s Record Setting Buying Spree

America is losing ownership and control of its companies at an accelerating rate.

Foreign takeovers and acquisitions by Japanese buyers are on pace to set all-time highs, breaking the previous records set in the 1980s when investors purchased assets such as Rockefeller Center and the Pebble Beach Golf Links.

The buying spree has been encouraged by the global economic recession which has undermined the value of many otherwise profitable enterprises. With Japanese companies holding so much of their assets in cash – roughly 11 percent, second only to China among the world’s 10 largest markets – they have the fiscal flexibility to make full purchases when the economy is in a rut. Japanese firms always have enough cash on hand to make major moves, buying control of cash strapped firms in other countries who are often tied up in credit markets, according to Bloomberg.

Japanese companies have nearly doubled their foreign acquisitions from a year ago – up to $48.6 billion through July 2008 compared to $25.4 billion for all of 2007. Just as Japanese companies have begun spending more overseas, American companies have spent markedly less – down roughly 67 percent from last year.

In March of 2008 Takeda Pharmaceutical Co. – Japan’s largest drugmaker – held nearly $15.5 billion in cash assets, allowing it to purchase Millennium Pharmaceuticals Inc. in the U.S. for $8.8 billion on April 10.

The purchase of profitable pharmaceutical companies shows a change of direction in Japanese acquisitions. Rather than purchasing expensive landmarks like Rockefeller Center and Pebble Beach which are unable to make money for their investors – both were resold by the Japanese for less than their purchased value – the Japanese are now planning for the future. Since purchasing U.S. based nuclear technology firm Westinghouse Electric Co., Toshiba Corp. has seen its profitability rise by a factor of five.

By selling our profitable industries to foreign interests we are doing no more than undermining the productive foundations of our economy. The billions of dollars in profits reaped by Japanese interests from American companies in the last few years could temporarily help stem the recessionary pressures felt by the United States. America needs to find a way to hold on to its profitable corporate assets or our economy will have become relegated to nothing more than an unproductive service (servant) economy unable to produce enough to sustain our strength and former living standards.

Editor’s Note – America is heading toward colonial status as it was in 1776, owned, controlled and managed by foreign masters. The American sellout is happening faster than ever as our companies are being taken over in a buying frenzy by foreign investors – like piranha fish consuming its weakened prey. Many of these companies have taken one hundred or more years to develop and were the source of our wealth, strength and living standards; now overnight, gone. We should be concerned and even outraged that our government let this happen. Please contact your congressperson immediately and demand that this practice be stopped.

Source Bloomberg:

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