VEDANTA Resources, the global natural energy resources company, has announced the merger of oil and gas subsidiaries Vedanta Limited and Cairn India, writes Scott Wright.
Vedanta Limited, a listed subsidiary of Vedanta Resources, has a 58.9 per cent stake in Cairn India, which Edinburgh-based Cairn Energy sold to Vedanta plc for $5.5 billion in 2011.
Cairn Energy retains a 10 per cent stake in Cairn India, which was valued by analyst Cannacord Genuity at around $780m (£500m) on Friday.
Under the terms of the deal, the minority shareholders of Cairn India will receive for each equity share held one equity share in Vedanta Limited. They will also receive one redeemable preference share in Vedanta Limited with a face value of 10 Indian rupees.
The deal is expected to be completed in the first quarter of 2016.
Anil Agarwal, chairman of Vedanta plc, said: "The merger of Cairn India and Vedanta Limited consolidates our position as India's leading diversified natural resources champion, uniquely positioned to support India's economic growth.
"The independent directors, at both Vedanta Limited and Cairn India, unanimously recommend the proposed combination."
"This marks a significant step towards achieving our stated long-term vision of a simplified group structure with alignment of interests between all shareholders for the creation of long-term sustainable value."
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