The shareholders of iron ore firm Sesa Goa have given their approval to a merger with group firm Sterlite Industries with 91.7% of the Sesa Goa shareholders present at a meeting in Goa voted in favor for the acquisition.

On the other hand, 92% of Sterlite Industries' shareholders approved the deal. Anil Agarwal-led Vedanta Resources has been planning to merge two of its units, Sesa Goa Ltd. (SESA) and Sterlite Industries (India) Ltd. in an attempt to reduce its debt in the country.

Sesa Goa is a leading iron ore while Sterlite Industries is involved in production of copper and aluminium. Vedanta Resources had earlier tried to merge its copper, aluminium and iron ore business units in 2008 but it had to abandon the plans following stiff opposition from investors.

Vedanta, which is the parent company, does not generate any sort of operating income and it only directly operates loss making Vedanta Aluminium. The company has been raising debt and consolidation will allow it to restructure it balance sheet and strengthen its financial position.

Under the deal, Sterlite shareholders will get three shares of Sesa Goa for every five shares held according to the swap ratio. Cairn India, Hindustan Zinc, Balco, Vedanta Aluminium, Madras Aluminium, Talwandi Sabo Power and Australian Copper Mines will work as subsidiaries of Sesa Sterlite. The company has not included the Konkola copper mines of Zambia int eh restructuring process.

The new entity, Sesa Sterlite will take over Vedanta Aluminium as well as Vedanta Resources 38.8% stake in Cairn India.