UK-based companies have overtaken their US rivals as the world's leading overseas investors, according to figures compiles by the United Nations Trade and Development Agency (Unctad).

Foreign direct investment - money spent by firms outside their home country - soared to a record $827bn in 1999.

Overall merger volume topped $1.1 trillion last year.

A record number of cross-border mergers and outright take-over of foreign companies was driving the surge.

Developing countries are back in favour as well, with foreign direct investments rising 15% to $198bn. This comes after a year of stagnation, when many investors were scared off because of the financial crisis in Asia, Russia and Latin America.

China had the biggest success in attracting investors, pulling in $40bn. The rest of Asia had to make do with about $51bn.

Among the world's regions, Latin America saw investment grow fastest, by 32% to $97bn. Again, one country managed to run off with the largest slice of the cake, with Brazil receiving $31bn of foreign direct investment.

UK number one

A spending spree by British companies boosted the UK to become the number one among overseas investors in 1999, with the United States relinquishing top dog status for the first time since 1988.

During the last quarter of 1999, UK firms spent a record £17.3bn ($28bn) on mergers and acquisitions. The three months before had seen overseas investments worth £5.3bn ($9.2bn).

The largest element in the UK's take-over balance for 1999 was Vodafone's purchase of US mobile phone company AirTouch.

Other big deals were HSBC bank buying into the US market with its acquisition of Republic New York bank (£4.4bn) and Scottish Power going after PacifiCorp (£4.2bn).

However, foreign firms were not shy about snapping up UK companies. The overall balance saw more investment coming into the UK than flowing out.

Foreign companies spent a record £33.8bn ($54.4bn) during the last quarter of 1999, and £10.6bn ($17.1bn) during July to September.

The biggest takeover will soon be undone though, as Germany's Mannesmann will have to let go of mobile phone operator Orange after itself becoming a takeover target. It was bought by Vodafone at the beginning of February.

The purchase of Mannesmann is worth $183bn (£110bn) - and it means that the total outward investment by the UK in 2000 has already exceeded its 1999 total.