Iran's Bank Omran made the largest single direct foreign investment in the United States in 1976. $250 million for a commercial and residential complex in New Orleans, according to a Commerce Department report to be released the dominant overall buyers.
The study, said Assistant Secretary Frank A. Weil, represents the most comprehensive monitoring of foreign direct investment activity ever attempted in the United States. It is also the first to identify individual transactions by name.
As for 1977, the Commerce Department predicts greater inward investment by foreigners. In the first nine months there were 260 identified transactions, of which 150 were recorded as completed, at a value of $2.1 billion, the same total recorded for the entire year of 1976.
The annual studies are compiled from government agency and press sources by the Office of Foreign Investment in the United States, a bureau that grew out of congressional and presidential concerns back in 1974 over the extent of foreign, especially Arab, investment in U.S. industry.
The report concludes that America's traditional trading partners. Western Europe, Japan and Canada, continued to dominate foreign investment last year. Of 263 separate transactions identified for 1976, they accounted for 77 per cent of the completed transactions and nearly three quarters of the total value. The Middle East oil-producing nations had $309 million out of a total of $2.1 billion in foreign investment that could be valued.
Much of the OPEC investment is represented by the New Orleans deal, a joint venture between Bank Omran of Teheran and Joseph Canizaro Interests. They plan to build Canal Place, a 23-acre complex of offices, hotels, retail malls and residential building that will ultimately cost over half a billion dollars.
Nine deals identified in the study represented foreign investments of over $50 million. The second largest was the $191 million acquisition by Switzerland's Sandoz Ltd. - a multinational manufacturer of pharmaceuticals, dyestffs and agrochemicals - of the Northrup King and Company, a seed company in Minneapolis. Also in the nine figure range is a plan for a $100 million plant to be built by Belgium's Union Miniere and a subsidiary listed as Jersey Miniere Zinc Co.
The report showed that direct investment was heaviest in manufacturing - chemicals and allied products, primary and fabricated metals and machinery - followed by finance, insurance and real estate as a group. A majority of the transactions involved acquisitions or mergers or situations where the foreign investor increased his equity in a U.S. company. Half of the activity was concentrated in five states: California, New York, Texas, Illinois and Pennsylvania.
The Office of Foreign Investment concedes that more stringent reporting requirements for acquisitions and equity increases make that form of investment more visible than real estate, for example, where no federal reporting is required.
Great Britain made the greatest number of separate investment in U.S. industry, 36, followed by Japan and West Germany, with 28 and 26 respectively. Saudi Arabia had three. But the top spot for the most money invested went to Switzerland, with $290 million, followed by West Germany, Iran and Belgium.
Three British investments accounted for more than half of that country's money total. General Cable Corp, of Greenwich, Conn., which is one-fifth owned by British Insulated Callendars Cables, Ltd., bought Sprague Electric Company of North Adams, Mass., a manufacturer of electronic and circuit components, for about $68 million.
BTR, Ltd. of London, which makes rubber and thermoplastics products, acquired S. W. Industries of Providence, R. I., for $30 million. And Hanson Trust Ltd., a British investment management company, through its U.S. subsidiary, Handson Industries, Inc. of New York, purchased the outstanding common shares of Hygrade Food Products Corp. of Southfield, Mich., for $20 million.
Germany also had three major transactions accounting for more than half of its total $256 million investment. The largest was the 30 per cent interest four banks acquired for $90 million in the Pennzoil Plaza building in Houston. The Friedrich Flick Group bought the Entex building there for $40 million. And Volkswagenwerke put $28 million toward what will ultimately be a $200 million VW plant in New Stanton, Pa.
Other large foreign deals in 1976 identified in the report were Belgium's Petrofina's $90 million joint venture with Hercules, Inc. of Wilmington to produce and market the raw materials for polyesters; and the $80 million purchase by Cadillac Fairview, a Canadian development, of four industrial parks, including ore in Maryland, from Boston-based mortgage bankers, Cabot, Cabot & Forbes.
Transactions involving OPEC countries included the Kuwait Investment Co.'s $10 million investment in the Atlanta (Ga.) Center. Ltd., a group of hotels, motels and tourist courts. And Pharoan Ghaith, the Saudi Arabian tycoon, put $20 million into the Bank of the Commonwealth in Detroit.
Among the pending transactions listed in the report is one at $600 million to build a new plant by Corpus Christi Joint Venture and Champlin Co., makers of chemicals and allied products, and Britain's ICI Ltd, and Solvay & Cie.