'Cairn India-Vedanta merger by year-end'
Anil Agarwal on Monday said the merger of his group's cash-rich oil firm Cairn India with its parent, Vedanta Ltd is likely to be completed by year end to create India's largest diversified natural resources company. Debt-laden Vedanta Ltd, previously known as Sesa Sterlite Ltd, had on Friday upped its offer to buy out the minority shareholders in its cash-rich subsidiary, Cairn India.
Instead of its June 2015 offer of one Vedanta share for each Cairn India share, plus a preference share worth Rs 10 that can be redeemed after 30 days or 18 months, the mining group has offered three more preference shares. "I want to create a true natural resource company out of India that can rival the likes of Bralia's Vale SA, Rio Tinto of the US or BHP Billiton of Australia," Agarwal, Chairman of Vedanta Group, said in an interview.
The merger of India's biggest private oil producer with the country's top producer of aluminum and copper will give India "a natural resources company of its own," he said. The deal, he said, is likely to concluded by end-2016. "Oil prices have fallen 27-30 per cent and mineral prices have fallen 7-8 per cent. The merger will help balance the risks," he said. Agarwal, 63, who rose from running a scrap-metal business to become one of the India's wealthiest tycoons, said the group will keep investing across its businesses.
"It is very important for India to create a very value creating company, risk diverse company and that is what is happening in the world and we wanted to have oil and gas, copper, zinc, iron ore, aluminium to be one company and that is what the merger proposed," he said.