Vedanta Ltd., Cairn India Ltd., and Vedanta Resources plc have confirmed a merger between Vedanta Ltd. and Cairn India.
Completion of the transaction is expected in the first quarter of 2016. The independent directors of both companies have unanimously recommended the proposed combination.
The all-stock deal will offer each Cairn India shareholder one ordinary share, and a 7.5%-redeemable preference share of Vedanta with a face value of 10 rupees, according to Bloomberg, quoting statements from both companies. The merger will give shareholders an implied premium of 7.3% over the last traded price of Cairn India stock.
Mayank Ashar, CEO of Cairn India, said, “The merger with Vedanta Ltd. will generate additional value for our shareholders and derisks Cairn India by providing access to a portfolio of diversified Tier 1, 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.”
Lazard & Co. advised Vedanta Ltd. on the transaction, while DSP Merrill Lynch Ltd. and JM Financial Institutional Securities Ltd. were the advisors for Cairn India, Bloomberg noted, and JP Morgan Cazenove and Morgan Stanley assisted Vedanta Resources.