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Vedanta Is Said to Study Options for Deal With Cairn Energy
Aug 12, 2010 10:28CST

NEW YORK, Aug. 12 -- Vedanta Resources Plc is in talks to purchase assets or take a multibillion-dollar equity stake in Cairn Energy Plc, a U.K. oil and gas exploration company, according to people with knowledge of the matter.

The talks are advanced, and a deal may be announced later this month, said the people, who declined to be identified because the negotiations are private. The companies have discussed a range of options, including an equity stake, asset purchases or a complete takeover of Cairn, one person said.

The move would represent a strategic shift by Vedanta, which has been focused more on commodities such as aluminum, zinc and copper. Cairn, based in Edinburgh, has a market value of 6.22 billion pounds ($9.7 billion). The company's largest asset is a 62 percent stake in Cairn India, which operates the country's largest onshore oil field.

Spokespeople for Cairn and Vedanta weren't immediately available to comment outside of regular business hours.

Vedanta, with a market value of 6.25 billion pounds, dropped 5 percent to 2,357 pence in London Stock Exchange trading yesterday. The London-based company's stock has declined 9.7 percent this year. Cairn fell 3.3 percent to 444.8 pence yesterday.

Cairn's Indian unit, listed in Mumbai as Cairn India Ltd., has a market value of about $13.5 billion. The U.K. company is also drilling exploration wells off the coast of Greenland.



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