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Foreign investment proposal: Caltex Australia Ltd/Golden Fleece Petroleum Ltd



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TREASURER

EMBARGO 3

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

FOREIGN INVESTMENT PROPOSAL CALTEX AUSTRALIA LTD/GOLDEN FLEECE PETROLEUM LTD

The Government has given approval under foreign investment

policy for the US owned Caltex Australia Ltd to acquire

the Victorian based petroleum marketer, Golden Fleece

Petroleum Ltd. Golden Fleece is a wholly owned subsidiary

of H.C. Sleigh Ltd, which in turn is owned as to 26.3% by

Caltex and 73·7% predominantly by Australian shareholders.

The proposal was subject to the provisions of the Foreign

Takeovers Act 1975 and was considered against the

background of the petroleum marketing industry in

Australia which is extensively foreign owned. In these

circumstances, foreign investment proposals must offer

significant economic benefits and/or significant ,

Australian equity participation before approval is granted.

In considering the proposal the Government noted Golden

Fleece * s declining position in the market, its relatively

poor profitability and.Sleigh's desire to diversify into more

profitable areas. The Government has concluded that a

merger between Golden Fleece and Caltex should result in

increased efficiencies in the petroleum marketing industry to the

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net benefit of consumers generally. Moreover the Government

has noted that Caltex will shottly be seelcing to introduce

23% local equity into its overall operations.in Australia

and that this would have the ..effect of maintaining the

existing level of Australian ownership in the petroleum

marketing industry and increasing it marginally in refining,

as well as giving the public increased investment

opportunities in the energy industry. Accordingly, the

Government concluded that the proposal should be approved

in terms of its foreign investment policy.

In examining the proposal the Government gave careful

consideration to the views of third parties and all State

Governments were consulted. The Government also notes

that the Caltex offer is subject to the approval of

H.C. Sleigh's shareholders who would be able to consider

any alternative offers for Golden Fleece.

CANBERRA ACT ■ ' ' '

3 April 1981