Vedanta pips Mittal to acquire Mitsui''s 51-per cent stake in Sesa Goa

24 April 2007

Vedanta has also said that it plans to buy another 20 per cent stake at the same price that it paid for Mitsui''s stake, taking its acquisition cost to $1.37 billion. Vedanta paid $981 million for bought Mitsui''s stake.

The Anil Agarwal-controlled Vedanta, which hopes to close the transaction by July, this year, says it will pay for the deal through a mix of newly committed bank debt facilities of $1.1 billion and existing cash resources.

The Sesa Goa acquisition marks Vedanta''s entry into the iron ore market to its basket of metals that include aluminium, copper and zinc. Sterlite Industries (India) Ltd (SIIL), the flagship company of the Vedanta Group, is a leading producer of copper in India.

The UK-listed, India focused company sees strong demand iron ore with China and India''s growth having led to a global surge in global steel production.

The Aditya Birla Group was also in the fray for the stake in Mitsui, which is shifting its business focuss from trading in natural resources to investments.

In a statement shortly after the deal, the Japanese company said that the sale would generate ¥50 billion (approximately Rs1,750 crore) in profit, which it would deploy to invest in other natural resources.