Agarwal defends Vedanta's move to buy stake in Anglo American

Metals-to-mining magnate Anil Agarwal has explained his decision to acquire a majority stake in international mining company Anglo American, a move that surprised analysts earlier this week.

"I like Anglo's entire balanced portfolio, both in South Africa and elsewhere. I believe Anglo has several world-class assets, including (diamond giant) De Beers," Agarwal told the weekly Sunday Times here amid speculation that he was planning a takeover bid after becoming the second largest shareholder in Anglo American.

Agarwal also said he did not favour any move to try to break Anglo American into South African and international arms as he believed the group's strength lay in both businesses.

What had attracted him to the company was its strategy, he said adding he believes the business had significant upside, especially as the team executed its business plan.

Agarwal's acquisition of shares worth $2.4 billion gives him a 12 per cent stake, just below that of South Africa's Public Investment Corporation, which has 13.5 per cent holding.

Analysts here said the purchase was surprising, considering that Agarwal had failed in a bid last year to merge his businesses with Anglo American, but there was no way of predicting what Agarwal's plans were.

An analyst who did not want to be named told the weekly that there were no or very limited synergies between Agarwal's Vedanta Resources and Anglo American.