VEDL Vedanta Limited

By Alex MacDonald and Ian Walker

LONDON--Vedanta Ltd.'s (500295.BY) merger with Cairn India Ltd. (532792.BY) moved a step closer toward completion on Friday after shareholders of the Mumbai-listed company gave the deal the green light at a general meeting.

Investors holding 97.84% of the company's total voting capital backed the merger. The deal still needs to be approved by Cairn India shareholders at a meeting to be held on Sept. 12.

The agreement, announced more than a year ago, aims to merge the Indian operating unit of billionaire Anil Agarwal's U.K.-listed Vedanta Resources PLC (VED.LN) with its majority-owned oil and gas firm Cairn India. Vedanta Resources already owns a near 60% stake in Cairn India and close to 63% of Vedanta Ltd.

The deal, however, had a lukewarm response from some of Cairn India's largest minority shareholders who hold sway over any vote.

In an effort to boost shareholder interest, Vedanta Ltd. sweetened the deal on July 25 by offering one Vedanta share and four preference shares with a 7.5% annual coupon for each Cairn India share, up from a previous offer of one share and one preference share.

The new offer implied a one-fifth premium to Cairn India's volume-weighted average price over the previous month, up from a 7.3% implied premium to the closing share price before the deal was announced in June last year.

Vedanta said in July it expects the deal close in the first quarter of 2017.

"The strategic rationale for merging Vedanta Limited and Cairn India remains highly compelling," Tom Albanese, chief executive of Vedanta Resources, said at the time of the revised offer.

And Sudhir Mathur, chief financial officer and acting CEO of Cairn India, said: "We are confident that the financial strength and diversified portfolio of [Vedanta's] Tier-I assets will provide de-risked earnings and stable cash flows, driving long-term value."

The revised offer terms have been approved by the boards of both companies involved in the tie up.

Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

September 09, 2016 09:15 ET (13:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.