For Sale: America

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The foreign shopping bender signals a major transformation in America's global economic role. For nearly four decades following World War II, the U.S. did the buying, savoring its role as the globe's foremost exporter of capital. U.S. investment power was so great that in 1968 French Economics Journalist Jean-Jacques Servan-Schreiber predicted that American multinational companies like IBM and ITT threatened to turn Western Europe into an economic province. Concern about foreign cash flowing into the U.S. arose briefly in the 1970s, when a weak U.S. dollar and the emerging clout of OPEC prompted fear of an Arab buying spree. By and large, however, the cautious oil sheiks steered their petrodollars into bank accounts and securities portfolios rather than toward the bricks and mortar of U.S. real estate and corporations.

But after years of mammoth U.S. budget and foreign-trade deficits, the situation today is radically different. The buying of America has virtually turned into an industry of its own, with sharp-eyed advance crews scouting out the country's most attractively undervalued treasures, researchers typing up thick intelligence reports on U.S. acquisition targets, finance teams huddling with investment bankers in Tokyo, London and elsewhere, and blue-chip law firms constantly at work drafting reams of tender offers, prospectuses and sale documents.

Foreign bargain hunters often pour enormous effort into their shopping. Michael Dornemann, a director of West Germany's Bertelsmann communications giant, flew to the U.S. more than 50 times over the past three years while deciding how his company should spend its $1 billion American shopping budget. Often taking the morning Concorde from Paris in order to put in a full day's work in the states, Dornemann visited more than 20 U.S. companies before choosing his recommended targets: Doubleday publishing and RCA records. The possibility of snagging both was considered so unlikely that he and his boss, Bertelsmann Head Mark Wossner, 48, had called it their "extreme case."

Nonetheless, they turned all their persuasive powers on Publisher Nelson Doubleday and GE Chairman John Welch, offering them hefty prices and even giving the GE boss a lecture on corporate strategy. (Says Wossner: "We told him that music was too far away from electric motors and rockets.") Then Wossner tried another tack. In separate meetings one day last September, he recalls, he gave each American executive the impression that the West Germans could afford to buy only one of the two companies. "Either you sell to us, or we'll go to the others," warned Wossner. By the end of that day, the Germans had won both prizes. Total price for the double-barreled victory: $805 million.

Foreign shopping fever reaches even into the country's remote fastnesses. When the brash British raider Sir James Goldsmith calculated that U.S. timberland was becoming a tempting prize, he launched a $500 million takeover bid at San Francisco's Crown Zellerbach paper company in order to grab the corporation's vast forests. As a result of the 1985 takeover, Goldsmith now owns 1.9 million acres of American forests in Washington State and Oregon.