Indian billionaire Anil Agarwal’s bold decision to splash out £2 billion ($2.5 billion) on a 12 percent stake in Anglo American plc (NGLOY), the world’s largest producer of platinum and diamonds has triggered plenty of speculation throughout global equity markets. Agarwal, who made his billions buying and transforming struggling Indian government mining assets, claims his bid to become ’s the miner's second-largest shareholder is purely about investing in a “great company with excellent assets”. Not everyone believes that his intentions are as straighforward.

The biggest rumor currently doing the rounds across Wall Street and London is that Agarwal will use his new position in the FTSE 100 mining giant to orchestrate a merger with Vedanta Resources plc (VDNRF), the company he founded and chairs. A sharp rise in Anglo American’s share price following the billionaire’s announcement suggests that Anglo investors have already started to price in that exciting possibility. (See also: The Basics Of Mergers And Acquisitions.)

Is a Takeover on the Horizon?

Agarwal has made no secret of his desire to combine Vedanta’s zinc, lead, silver, copper, iron ore and aluminum mining expertise with Anglo American. Last year an informal approach to make it happen was reportedly rebuffed, making a second approach appear increasingly likely now that Argarwal could be set to have a seat on the board of both firms.

According to the Financial Times, people familiar with the billionaire’s ambitions claim he dreams of building a company to rival the world’s biggest miners such as BHP Billiton (BHP) and Rio Tinto (RIO). Combining Anglo American with Vedanta would certainly help to achieve such aims.

Failing that, it is almost certain that Agarwal’s 12 percent stake will at least enable him to influence corporate activity at Anglo. That would include playing an active role in the miner’s attempts to dump a significant chunk of its South African operations. Rising costs, red tape and political uncertainty have led to a sharp decline in the country’s mining prospects over the past two decades. (See also: Can Global Mining Stocks Outperform in 2017?)