Overseas investment decision for case 200820006 - BHP Billiton Group

An overseas investment in sensitive land, being the Applicant's acquisition of rights or interests in up to 100.0% of the shares of Rio Tinto Group which owns or controls:

• a freehold interest in 114.1039 hectares of land at Coast Road, Punakaiki-Rapahoe SH 6, Westland; and
• a freehold interest in 125.2500 hectares of land at Port Marsden Highway, Marsden Point, Whangarei; and
• a leasehold interest in 8.0367 hectares of land at 101 Collins Avenue, Tawa, Wellington; and
• a freehold interest in 405.2914 hectares of land at Tiwai Road, Awarua Plains, Invercargill; and
• a leasehold interest in 1667.3048 hectares of land at Tiwai Road, Awarua Plains, Invercargill. An overseas investment in significant

An overseas investment in significant business assets, being the Applicant's acquisition of rights or interests in up to 100.0% of the shares of Rio Tinto Group, the consideration for which exceeds $100m.

The Applicant has applied to several regulatory bodies worldwide for consent to the proposed acquisition. The application to the Overseas Investment Office is part of that process.

The Applicant comprises BHP Billiton Limited (BHP B Limited) for itself and its direct and indirect wholly-owned subsidiaries, and BHP Billiton plc (BHP B Plc). BHP B Limited is incorporated in Australia and BHP B Plc is incorporated in the United Kingdom.

BHP B Limited and BHP B Plc are parties to a dual listed company (DLC) structure. As a result, BHP B Limited and BHP B Plc have a relationship whereby, while each exists as a separate company, they operate on a combined basis and are run by a unified management team. The Applicant is listed on a number of stock exchanges (including Australia, London, South Africa, and New York).

The Applicant is an important participant in major commodity businesses, including aluminium, energy coal and metallurgical coal, copper, ferro-alloys, iron-ore and titanium. It also has substantial interests in oil and gas, nickel, diamonds and silver. The Applicant has approximately 39,000 employees and 60,000 contractors working in more than 100 operations in approximately 25 countries.

The rationale for acquiring Rio Tinto is that, once merged, the two entities will be better placed to compete in the natural resources industry. The Proposed Acquisition would result in an unparalleled strategic fit in terms of asset mix and quality.

The overseas investment transaction has satisfied the criteria in sections 16 and 18 of the Overseas Investment Act 2005. The 'substantial and identifiable benefit to New Zealand' criteria were satisfied by particular reference to the following factors:

Overseas Investment Act 2005
17(2)(b) – Indigenous Vegetation/Fauna
17(2)(c) – Trout, salmon, wildlife and game

Overseas Investment Regulations 2005
28(b) – Key person in a key industry
28(c) – Affect image, trade or international relations
28(e) – Previous investments
28(f) – Advance significant government policy or strategy