Cairn India shareholders agree merger with Vedanta Limited
Mumbai (AFP) –
Oil and gas giant Cairn India said on Monday that its shareholders had approved a merger with Vedanta Limited, the country's biggest producer of aluminium and copper.
The tie-up will help create an Indian natural resources group that is able to rival the British-Australian multinational Rio Tinto or mining giant BHP Billiton.
Indian billionaire Anil Agarwal, owner of London-listed conglomerate and parent company Vedanta Resources, announced a plan to merge the two units in June last year in a move aimed at streamlining debt.
"I am pleased that the shareholders of Cairn India have approved the merger of Cairn India with Vedanta Limited," Navin Agarwal, chairman of Cairn India, said in the statement.
"We are confident that the financial strength and diversified portfolio of Tier-I assets of the merged company, with strong growth potential, will provide de-risked earnings and stable cash flows and drive long-term value," he added.
The deal has to be approved by Indian courts but is expected to be cleared by the end of the financial year, Cairn added in the statement.
When announcing the plan last year, Anil Agarwal said the move was a "significant step" towards simplifying Vedanta Resources' structure and creating "long term sustainable value".
Vedanta Limited chief executive Tom Albanese said at the time that it would move the companies closer to building an Indian integrated resources group that could take on the likes of BHP Billiton or Brazilian mining company Vale.
Vedanta Resources paid more than $8 billion to UK-based energy giant Cairn in 2011 for a majority stake in Cairn India.
© 2016 AFP