India: Vedanta’s Cairn acquisition runs into obstacles
Cairn boss breaches protocol; Vedanta struggling to raise cash
Cairn Energy chief executive Bill Gammell (left) and Vedanta chairman Anil Agarwal: obstructed by protocol, bureaucracy and a jealous rival
When Vedanta Resources announced its intention to buy a controlling stake in the Indian oil interests of Cairn Energy on August 16 for up to $9.6 billion it looked like a rare and much-needed triumph for New Delhi. Here was a classic win-win outcome. Mining company Vedanta, London listed but India oriented, was desperate to make a splash in the country’s oil and gas sector. Its billionaire founder and executive chairman, Anil Agarwal, saw Cairn India, 62.4% owned by its Edinburgh-based parent, as his destiny.
Buying between 51% and 60% of Cairn India at Rs355 ($8) a share (a hefty premium to Cairn India’s share price) would catapult Vedanta into the big league, creating, the company grandiloquently promised, an "Indian natural resources champion".
Cairn Energy coveted cash, plain and simple. Its founder/chief executive, Sir Bill Gammell, chair of Cairn India and a former Scottish rugby union international, was a pioneer in India’s energy sector.