New Delhi:  Industrialist Anil Agarwal on Sunday announced the merger of two of his group companies — the oil and gas exploration major Cairn India with the natural resources arm Vedanta Ltd. Cairn shareholders will get one equity and one redeemable preference share of Vedanta.

The transaction is intended to be completed by the first quarter of 2016, the group said.

“The merger of Cairn India and Vedanta Ltd consolidates our position as India’s leading diversified natural resources champion, uniquely positioned to support India’s economic growth,” Vedanta chairman Agarwal said.

“The independent directors, at both Vedanta and Cairn India, unanimously recommend the proposed combination. This marks a significant step towards achieving our stated long-term vision of a simplified group structure with alignment of interests between all shareholders for the creation of long-term sustainable value.”

The group, in a filing with stock exchanges on Sunday, said the strategy remains unchanged to continue focus on delivering attractive growth, sustainable development, long-term value for shareholders and to sustain strong dividend distribution.

“Approximately 752 million each of equity shares and redeemable preference shares will be issued to the minority shareholders of Cairn India by Vedanta Limited pursuant to the merger,” it said, adding: “No shares will be issued to Vedanta Limited or any of its subsidiaries for their shareholding in Cairn India.”

Vedanta Limited itself was created with the merger of Sesa Goa, Sterlite and Vedanta Aluminium.

Cairn said on Saturday in a stock exchange filing: “A meeting of Board of Directors of the company will be held on June 14, 2015, inter alia, to consider and evaluate amalgamation of the company with Vedanta Limited.”

Vedanta took majority control of Cairn India for $8.67 billion in 2011 and holds 59.9 percent in the latter through its various units.

Merging Cairn India with itself would provide Vedanta access to the oil explorer’s cash and help reduce its debt burden. At the end of March this year, Vedanta had total liabilities worth over Rs.99,000 crore on a consolidated basis.

The Anil Agarwal-led Vedanta earlier this month hiked stake in its oil and gas exploration subsidiary Cairn India by nearly five percent for $315 million from a wholly-owned subsidiary — Twinstar Mauritius Holdings (TSMHL).