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Vedanta Limited and Cairn India Limited merge

Hydrocarbon Engineering,

Vedanta Resources plc is one of the world’s leading diversified natural resources companies. The organisation has recently announced a merger between two of its subsidiaries, Vedanta Limited and Cairn India Limited.

Key highlights

  • For each equity share held, minority shareholders of Cairn India Limited will receive one equity share in Vedanta Limited and one redeemable preference share in Vedanta Limited with a face value of INR 10.
    • An attractive transaction for Cairn India shareholders, exposing them to Vedanta Limited’s well-invested Tier-I.
  • Implied premium of 7.3% to the previous close.
  • Strategy remains unchanged, with continued focus on delivering. attractive growth, sustainable development and long-term value for all shareholders.
  • Commitment to growth and to sustain strong dividend distribution.
  • Completion expected in 1Q16.

Vedanta plc has proposed a merger of Cairn India into Vedanta Limited, through a Scheme of Arrangement under Indian law. Upon completion, minority shareholders of Cairn India Limited will receive one equity share in Vedanta Limited of face value INR 1 each and one 7.5% Redeemable Preference Share (RPS) in Vedanta Limited with a face value of INR 10 each.

Chairman of Vedanta plc, Anil Agarwal, commented: "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."

Vedanta Limited Comment

CEO of Vedanta Limited, Tom Albanese, commented: "This transaction consolidates our portfolio of Tier-I assets which, combined with strong management, will deliver superior returns for all shareholders. It will result in improved financial flexibility to allocate capital to the highest return projects and sustain strong dividends. The combined entity is uniquely positioned to help unlock India's wealth of world-class energy and mineral resources."

Cairn India Limited Comment

CEO of Cairn India, Mayank Ashar, commented: "The merger with Vedanta Limited will generate additional value for our shareholders and de-risks Cairn India by providing access to a portfolio of diversified Tier-I, low cost, long-life assets, to deliver significant near term growth. Our Rajasthan fields continue to remain our core asset. The financial strength of the enlarged group will ensure greater access to capital to further Indian oil and gas development."

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