In an interview with the Economic Times newspaper, Vedanta founder Anil Agarwal said ONGC would continue to remain a partner in Cairn India. “Whatever approvals are needed, whatever needs to be done for such a deal, we’ll do,” said Agarwal, a billionaire former scrap metal dealer who built his mining empire through a series of bold acquisitions. Analysts expected the deal would go through. “There are regulatory issues and they can delay the process of the closing the deal, but I would be very surprised if they turn out to be deal-breaker,” said Saeed Jaffery, a sector analyst with Ambit Capital in Mumbai. “The key issue is if Vedanta is qualified enough to own a business that it has no experience in running. However, they are likely to retain the core management of Cairn India and if that comfort is given, it would not be a major concern,” he said. Cairn Energy Chairman Gammell on Monday said the entire management team of Cairn India would remain intact.
Vedanta is buying between 40 and 51 percent of Cairn India from Cairn Energy, which owns a 62.4 percent stake, and will offer to buy up to 20 percent from other shareholders for a total stake of 51 to 60 percent. “This acquisition involves natural resources and therefore the government would like to know the details of change of ownership before giving the go-ahead,” said S.P. Tulsian, a Mumbai-based independent investment analyst. “It’s more procedural in nature.” Vedanta is offering Cairn India’s minority shareholders 355 rupees per share for the additional stake of up to 20 percent. The offer opens on October 11. Shares in Cairn Energy were down 2 percent in London, while Vedanta shares, which fell 20 percent last week on speculation of the deal, were little changed.