Anil Agarwal purchases $2.44 bn share in Anglo American

The Dollar Business Bureau

Vedanta Resources Plc chairman Anil Agarwal on Thursday announced he is planning to buy a $2.4 billion of Anglo American Plc shares after Vedanta’s merger proposal failed last year.

Vedanta’s holding company Volcan Investments Ltd. will issue a mandatory exchangeable bond to fund and Anglo American shares will be used to secure this purchase.

According to the investor’s statement, Agarwal doesn’t intend to make a takeover offer for the company, it said.

Following the completion of this purchase, Vedanta would become Anglo’s second-largest shareholder next only to South Africa’s Public Investment Corp.

“It gives him an extremely good seat at the table if there is going to be any corporate activity. We expect that M&A is going to be the next phase and maybe this is firing the starting gun,” Investec Plc mining research head Jeremy said.

Last year, Anglo stood out as the best performing stock on London’s FTSE 100 Index, gaining 288% after its shares benefited from rebounding commodities prices and a cost-cutting program.

Anglo American continues to rank among world’s top five miners and owner of the largest diamond producer, De Beers, in South Africa.

Both Volcan and Vedanta stressed the decision was a personal investment decision of Agarwal. He had no acquisition plans in mind.