Sterlite and Sesa Goa: Buy Sell or Hold?

The merger of country’s biggest iron ore exporter Sesa Goa and its largest diversified metals company Sterlite Industries, also with its subsidiaries, makes the newly formed entity Sesa Sterlite the seventh-largest resources player in the world.

In a move to consolidate all its Indian operations into a single entity, Vedanta Resources announced a merger of Sterlite Industries into Sesa Goa in an all-share transaction, whereby three Sesa Goa shares will be issued for every five existing Sterlite shares.

According to the deal, Vedanta Aluminium along with the Madras Aluminium Company will also be consolidated into Sesa Sterlite. Vedanta will also transfer its 38.8% holding in Cairn India to Sesa Sterlite. The parent company’s debt which will thus be lowered by 61% and Sesa Sterlite will take on debt of $5.9 billion.

Check out what broking houses have to say about investing in Sesa Goa and Sterlite Industries, post merger plan.