Vedanta buys Anglo zinc assets for $1.3 bn

Beating rivals like China Metallurgical and Xstrata, Vedanta Resources today said it has finalised a deal with the London-based Anglo American's entire zinc business in Ireland and Africa for $1.34 billion deal.

"Vedanta Resources and Anglo American have signed a definitive share purchase agreement under which Vedanta, through one of its controlled group companies (Hindustan Zinc), will acquire Anglo American Zinc for a total consideration of $1.34 billion," the company said in a statement here.

The buyout will be funded entirely through cash. As on March 31, 2010, Vedanta had cash, cash equivalents and liquid assets of $7.2 billion.

The deal will be completed in next 12 months, making it the world's zinc and lead producer, the company said. "These assets complement our existing portfolio, creating the largest zinc and lead producer in the world," Vedanta Resources chairman Anil Agarwal said.
       
The acquisition will increase the company's annual zinc and lead capacity by 37 per cent to 1.4 million tonne, representing 11 per cent of the global zinc market, vice-chairman Naveen Agarwal said during an analyst conference call later in the day. At present, Vedanta has an annual zinc output of 1.06 million tonne.