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Vedanta to merge Sterlite and Sesa Goa in $14 bln deal

London , Sun, 26 Feb 2012 ANI

London, Feb 26 (ANI): Indian commodities giant Vedanta has planned to merge two of its largest subsidiaries, Sterlite Industries and Sesa Goa, in a near 14 billion dollars deal.


London listed Vedanta Resources would merge the two Indian firms into a single entity named Sesa Sterlite, to form what will become the world's seventh largest diversified mining company.


The deal, first mooted in 2008, but dropped as a result of the global financial crisis, has been designed to simplify Vedanta's corporate structure and save at least 200 million dollar a year, The Telegraph reports.


According to the report, Sesa Sterlite will have a diverse asset base, with interests in resources including iron ore, oil and gas, zinc, aluminium, silver and copper.


Based on 2011 figures, revenues will total 14.2billion dollars with adjusted earnings of 5.3 billion dollars.


As part of the deal, Vedanta is merging its 58.9 pc investment in Cairn India into Sesa Sterlite.


But as a result of the transaction, Vedanta will have just two investments, a 58.3pc holding in Sesa Sterlite, which will be primarily listed in India with secondary American Depositary Receipts listed in New York, and a 79.4pc holding in Konkola Copper Mines.


The deal is dependant on approval from shareholders in Sesa and Sterlite, as well as Vedanta, due to the transfer of Cairn, which is viewed as "Class 1" transaction under UK Listing Authority rules. (ANI)


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