Offer for Sterling Industries Goes Unconditional

Caledonia Investments PLC
17 January 2000

                                
                                   
 CALEDONIA INVESTMENTS BID VALUING STERLING INDUSTRIES AT £97 MILLION
                       GOES WHOLLY UNCONDITIONAL

Caledonia  Investments plc ('Caledonia'), the diversified trading  and
investment company with a range of subsidiaries and associates  and  a
portfolio  of  strategic and general investments, has today  announced
that  it has declared wholly unconditional its offer for those  issued
ordinary  shares in Sterling Industries PLC ('Sterling')  not  already
owned ('Offer').

Background to and reasons for the Offer

There  has been a long association between the two companies  and  the
Caledonia group has held a substantial shareholding (27.21 percent  at
the time of its Offer) in Sterling since 1989. In addition, The Cayzer
Trust  Company  Ltd,  a  major shareholder in  Caledonia,  held  45.44
percent of Sterling. These holdings had contributed to very low levels
of  liquidity  in  Sterling shares. Furthermore,  one  of   Sterling's
principal  assets was its 9.59 percent shareholding in Caledonia.  The
boards of both Caledonia and Sterling became increasingly of the  view
that  these  cross-shareholdings were not helping the share  price  of
either  company to reflect its underlying value and concluded that  an
agreed  offer by Caledonia for Sterling represented the  best  way  to
resolve this situation.

The recommended Offer by Caledonia to acquire the 72.79 percent of the
issued  ordinary  shares in Sterling that it did not already  own  was
announced on 25 November 1999.

Value of the Offer

On  the  basis  of  Caledonia's middle  market  share  price  (net  of
Caledonia's interim dividend of 7.5 pence) of 740 pence on 25 November
1999, the Offer (including the interim and special dividends totalling
48 pence per Sterling ordinary share) amounted to £71 million, valuing
the whole of Sterling at £97 million.

Results of the Offer

As  at  3  p.m.  on  14  January 2000, Caledonia  had  received  valid
acceptances  in  respect  of a total of 20,628,563  Sterling  ordinary
shares, representing 67.92 percent of Sterling's issued ordinary share
capital. When added to the 8,265,450 Sterling ordinary shares  already
held  by  the  Caledonia  group, Caledonia now  either  owns,  or  has
received  valid  acceptances in respect  of,  a  total  of  28,894,013
Sterling  ordinary  shares representing  95.13 percent  of  Sterling's
total issued ordinary share capital.

Caledonia intends to apply the provisions of sections 428 to  430F  of
the  Companies Act 1985 to acquire compulsorily the remaining Sterling
ordinary shares and also to seek the cancellation of Sterling's  Stock
Exchange listing.

Caledonia  has also today declared its offer for Sterling's preference
shares wholly unconditional.

Peter  Buckley,  Chairman  and Chief  Executive  of  Caledonia
Investments plc, commented:

'We  are delighted with the results  of the recommended  offer
for  Sterling. It had become clear to us that Sterling's small
market float and ownership structure was not helping the share
prices of either Sterling or Caledonia, and the time had  come
for the cross-shareholdings to be unwound.

'We  believe  that  Sterling's  interesting niche  engineering
businesses  offer good prospects in the medium term  and  that
the  scope for exploiting their potential will be enhanced  by
bringing the company fully into the Caledonia group.'


Enquires:  Peter Buckley, Chairman and Chief Executive
           Caledonia Investments plc        Tel: [phone]