Cairn India Ltd. plans to merge with Vedanta Ltd. in a transaction expected to close in early 2016.
Vedanta’s oil and gas operations comprise the assets of Cairn India in India, Sri Lanka, and South Africa. Vedanta (formerly known as Sesa Sterlite Ltd./Sesa Goa Ltd.), is an Indian listed subsidiary of Vedanta Resources PLC and already owns 58.9% of Cairn India.
The deal was announced June 14 after unanimous recommendations from independent directors at both companies.
Vedanta Ltd. produces oil, gas, zinc, lead, silver, copper, iron ore, aluminum, and commercial power. Cairn, meanwhile, operates 27% of India’s domestic crude oil production. Cairn’s portfolio of nine blocks includes one block in Rajasthan, two on the west coast, four on the east coast, and one each in Sri Lanka and South Africa.
“Our Rajasthan fields continue to remain our core asset,” said Mayank Ashar, chief executive officer of Cairn India (OGJ Online, Apr. 6, 2015). “The financial strength of the enlarged group will ensure greater access to capital to further Indian oil and gas development.”
The transaction is dependent on shareholder and court approvals.
After completion, Vedanta PLC ownership in Vedanta Ltd. is expected to decrease to 50.1% from 62.9%. Cairn India minority shareholders will own 20.2% and Vedanta minority shareholders will own 29.7% in the enlarged entity.
As of Mar. 31, Cairn India had gross assets of $10.7 billion and Vedanta had gross assets of $8.6 billion.