The Competition Commission of India has approved the mega-merger of Sterlite Industries and Sesa Goa announced by parent company Vedanta Resources on February 25 this year.
The merger, which will lead to a new entity, Sesa Sterlite, is aimed at simplifying the group structure of London-listed Vedanta Resources and will create the seventh-largest natural resources company in the world.
“The Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission hereby approves the combination under sub-section (1) of section 31 of the (Companies) Act,” the CCI said in its order.
The nod is first among several regulatory approvals, required for the merger.
Vedanta had said earlier that it expects to complete the restructuring process by the year end after which the new entity will be listed on the bourses.
According to the restructuring exercise, Sesa Sterlite will become the holding company of Vedanta’s all group firms except Konkola Copper Mines.
This group firms include Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Talwandi Sabo Power and Australian Copper Mines.
Post merger, Vedanta Resources will hold 58.3% in Sesa Sterlite. Sterlite shareholders will get three shares of Sesa Goa for every five shares held according to the swap ratio.