Vedanta Resources plans to spend up to $9.6 billion clinching control of Cairn India, giving billionaire mining magnate Anil Agarwal a slice of India's oil reserves and exposure to surging demand. Britain's Cairn Energy said on Monday it would sell most of its controlling stake, delivering billions of dollars to shareholders, while Agarwal's Vedanta will join BHP Billiton as the only miner with large oil interests.
India-focused Vedanta will buy between 40 and 51 percent of Cairn India from Cairn Energy, holder of a 62.4 percent stake, and will offer to buy up to 20 percent from other shareholders to give it a stake of between 51 and 60 percent.
Vedanta said Cairn India, the country's No 4 oil and gas company, has the potential to almost double current production to about 240,000 barrels of oil per day - around a quarter of India's output - allowing it to benefit from rising demand amid industrialisation, economic growth, and an expanding population. The miner expects Cairn India to produce around 200,000 bopd by early 2012. India's government expects the economy to grow 8.5 percent this fiscal year, while the country's population is expected to overtake China in the next couple of decades. "The proposed acquisition significantly enhances Vedanta's position as a natural resources champion in India," said Agarwal, chairman of Vedanta and the group's biggest shareholder with a 61.2 percent holding.