If U.S. real estate was the hot asset back in the 1980s, these days it's U.S. corporations.
Back in the early 1980s, the U.S. was still in the throes of a prolonged economic downturn that pushed the value of many assets down to bargain levels. At the same time, other countries were on the rise, looking for ways to spend their newfound wealth.
The end result was prized properties such as California's Pebble Beach golf course and New York's Rockefeller Center being bought up by rich Japanese buyers. (Those same Japanese buyers eventually sold those assets at a loss, but that's a story for another day.)
Fast forward to 2011, and the U.S. economy is again reeling -- even as the roster of billionaires in places like China, India and Brazil keeps expanding. Might these newly rich moguls look to go bargain-hunting here in the U.S.? The likelihood rises with every passing day as many of our assets grow ever cheaper.
For foreign buyers, American companies provides both the cachet of a trophy property and access to the world's largest consumer market.
To be clear, Uncle Sam frowns on most cross-border deals involving high-tech companies (citing concerns that our security might be compromised), but many other industries remain open game.
These five iconic American companies are currently priced for sale after their shares have dropped in the latest market downturn. Could they be the next target of a big foreign buyout?
1. Avon Products (NYSE: AVP)
Market Value: $8.9 billion
Fall from 52-Week High: 43%
As the Chinese, Indian and Brazilian economies develop, many of their citizens are moving up into the middle-class. Demand for cosmetics and jewelry is rising as these consumers start to earn more than they absolutely need to survive.
The move from 'necessities' to 'luxuries' dovetails with the Avon model. And the company's independent representative sales model is a nice fit with an expanding set of women that are seeking to shed administrative jobs for something more entrepreneurial.
2. Fortune Brands (NYSE: FO)
Market Value: $8.0 billion
Fall from 52-Week High: 21%
You may not know this company, but you know its brands, which include Jim Beam whiskey, Moen faucets and Master Lock security products.
Some of these brands are already well-known in international circles, while others have yet to make a splash. That's a perfect opportunity for a foreign purchaser to take this American icon even deeper onto the global stage.
3. Hasbro (NYSE: HAS)
Market Value: $4.6 billion
Fall from 52-Week High: 31%
This company's brands are synonymous with leisure: Playskool, Nerf, Transformers, G.I. Joe, Tonka Trucks, Scrabble, Monopoly, etc. Sales actually grew in 2008 and 2009, even as the global economy was hurting. Thanks to a steady stream of new products and movie-based licensing revenues, sales and profits are on track to grow at a double-digit pace this year, making this a timely purchase for acquirers looking for growth vehicles.
4. Marriott Int'l (NYSE: MAR)
Market Value: $9.7 billion
Fall from 52-Week High: 35%
If you're a new billionaire looking to become a titan in the lodging industry, you have two choices: Start from scratch, opening properties around the world; or simply acquire Marriott, which operates and franchises more than 3,500 properties worldwide.
More than half of those properties are here in the U.S., which may prove quite appealing as U.S. tourism is setting up to be one of the faster-growing industries, thanks to the weaker dollar that makes trips more affordable for visitors from Europe, South America and Asia.
5. Newell Rubbermaid (NYSE: NWL)
Market Value: $3.5 billion
Fall from 52-Week High: 41%
It's not just the second name in the company title that is well-known. This company also owns a whole range of solid brands, from Calphalon cookware and Sharpie markers to Levelor blinds.
Recent management changes are also expected to deliver improved financial results, which you can read more about in my article, Why the 'Icahn Effect' Could Send These Stocks Higher.
The Investing Answer: To be sure, U.S. assets are 'in play.' Foreign purchasers are unlikely to buy anything worth more than $10 billion, and a purchase of a company that is worth less than $1 billion may simply not be of interest to those seeking to capture a big trophy. To acquire these companies, foreign purchasers would need to offer a hefty premium to their current stock prices to convince reluctant owners to sell.
Even in the absence of an acquisition, these companies are all quite appealing for investors thanks to their established brands, high levels of cash flow and growth potential when the global economy rebounds.
