Rio Tinto has announced plans to acquire US-based lithium producer Arcadium Lithium in a $6.7 billion (£5.1 billion) deal.
The all-cash offer, valued at $5.85 per share, will position the London-listed miner as the world’s third-largest lithium supplier, a key material used in products such as electric vehicle batteries, laptops, and smartphones.
The acquisition has received unanimous approval from both companies’ boards and is expected to be completed by mid-next year.
Rio Tinto CEO Jakob Stausholm stated, “Acquiring Arcadium Lithium is a major step in Rio Tinto’s long-term strategy, establishing a world-class lithium business alongside our leading aluminium and copper operations to supply essential materials for the energy transition.”
Arcadium Lithium CEO Paul Graves said, “We believe this is a compelling cash offer that represents full and fair long-term value for our business, while reducing our shareholders’ exposure to the risks of executing our development portfolio and navigating market volatility.”
The deal comes at a counter-cyclical moment, as lithium prices have plummeted over the past year due to increased production and significantly lowered expectations for electric vehicle demand.
In China, for instance, lithium carbonate prices have dropped by half in the past year and are nearly 90% lower than two years ago, causing Arcadium’s shares to fall from $7 a year ago to below $3 last month.
