25 April 2019

South Africa: Vedanta Chairman May Have His Sights On Anglo, but a Takeover Will Not Be Easy

analysis

The UK Telegraph reported on the weekend that Anglo American was girding itself for a potential takeover by Vedanta chairman and self-made Indian mining tycoon Anil Agarwal. This is no big surprise: Agarwal's over 20% stake in the venerable South African mining company rests on a convertible bond instrument that matures in 2020, when the Anglo shares can be transferred to the lenders. That means Agarwal has to act, by either refinancing his stake or raising it. A takeover will not be easy, though there may be bankers who would back the attempt.

Few people in the mining industry are as bullish on South Africa as Anil Agarwal, the enigmatic chairman of London-listed Vedanta Resources. The Indian mining tycoon, who has a more than 20% stake in Anglo American, is always effusive in his praise for the South African mining sector - almost to the point where one wonders if he inhabits some parallel universe.

Policy uncertainty? Surging costs? Violent labour unrest? Eskom? He brushes it all aside with a wide smile and modest manner. South Africa, in his universe, is the place to be if you are a miner.

Speaking to Reuters last year, Agarwal said he had convinced...

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