Billionaire Agarwal Creates BHP-Style Indian Resources Major – by Saket Sundria and Swansy Afonso (Bloomberg News – April 12, 2017)

Anil Agarwal has sealed the merger of his mining and energy businesses in India, creating a BHP Billiton Ltd.-like resources conglomerate, even as a recent investment in Anglo American Plc raises questions about how far the billionaire’s ambitions stretch.

Vedanta Ltd. combined with unit Cairn India Ltd. on Tuesday and fixed April 27 as the record date for determining the list of the latter’s shareholders who will be allotted stock in the parent company, according to a joint statement. Vedanta will offer minority shareholders of oil producer Cairn India one equity share and four redeemable-preference shares with a face value of 10 rupees each as part of the deal agreement.

The merger gives shareholders a company with a diverse portfolio encompassing iron ore, bauxite, aluminum, power, oil and gas that has the ability to ride out commodity cycles.

Agarwal, a self-made billionaire, recently surprised the mining industry by becoming the second-biggest shareholder in Anglo American through an unusual deal that led analysts to speculate he might be planning to force a break up of or a merger with the century-old miner.

“This merger will increase the appeal of Vedanta Ltd. to global investors as it simplifies the structure and increases the size and free float of the company,” Tom Albanese, chief executive officer of Vedanta, said in the statement. The firm will continue to focus on remaining a low-cost and low-debt operator, he said.

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