Indian miner Vedanta Resources has announced that it plans to merge its Indian subsidiaries iron ore miner Sesa Goa and the country's largest copper and aluminum producer Sterlite. Vedanta had earlier stated that it was considering the consolidation and simplification of its corporate structure.
According to the proposed merger of Sterlite into Sesa Goa, three Sesa Goa shares will be issued for every five Sterlite shares. The merger will form a new company to be named Sesa Sterlite. Following the merger, Vedanta Resources will own 58.3 percent in Sesa Sterlite.
The merger is expected to create the world's seventh largest global diversified natural resources company in terms of EBITDA. It is expected that the restructuring will cut costs by $200 million per year.
At the end of December 2011, Vedanta owned 53.3 percent of Sterlite Industries and 55.1 percent of Sesa Goa.