Toronto, Nov 28 (Inditop.com) Canadian companies are on a buying spree abroad, according to an official report.
Thanks to the robust Canadian dollar which increased their buying power, the country’s companies have made record acquisitions in the third quarter of the years, Statistics Canada said in its report Friday.
The Canadian dollar, also called loonie, has risen more than 20 percent against the US greenback since March.
During the third quarter alone the Canadian dollar has risen as much as six percent against the US greenback.
According to the report, Canadian direct investment abroad reached $25.6 billion in the third quarter — the highest levels in 2009.
The buying spree by Canadian companies in the US accounted for about three-quarters of that record Canadian investment abroad in the third quarter.
On the other hand, foreign direct investment in Canada also reached the record level of $17 billion in the third quarter, following two quarters of subdued cross-border financial transactions.
Of the $17-billion foreign direct investment in Canada in the third quarter, the European Union accounted for $7.9 billion and the US $7.1 billion.
“This renewed strength was mostly attributable to a pickup in direct investment acquisitions activity,” Statistics Canada said.
The unprecedented downturn in the US economy and the rising Canadian dollar prompted Canadian companies to make acquisitions across the border now before the US economy rebounds.
Canadian companies and banks, which have remained relatively unscathed by the global meltdown, are trying to leverage the crisis to beef up their presence in the US to become important players in the world’s biggest market.
The top Bank of Montreal has bought the North American franchise of Diners Club to boost its corporate credit card business. Sun Life, the Canadian leader in insurance, is also looking for acquisitions in the US.
