Rio Tinto to become a top lithium producer with $6.7 bln Arcadium buy
Rio Tinto said on Wednesday it would acquire Arcadium Lithium for $6.7 billion, in an agreed all-cash deal that would make it one of the world's largest lithium producers.
Rio said it would pay $5.85 per share for the U.S.-based lithium miner. That represents an almost 90% premium to Arcadium's closing price of $3.08 per share on Oct. 3, the day before Reuters exclusively reported on a potential deal between the two firms.
Rio would gain access to lithium mines, processing facilities and deposits in Argentina, Australia, Canada and the United States to fuel decades of growth, as well as a customer base that includes automakers Tesla, BMW and General Motors.
Lithium prices have floundered due to Chinese oversupply and a slowdown in electric vehicle sales, resulting in miners of the metal emerging as attractive takeover targets.
«This is a counter-cyclical expansion aligned with our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle,» Rio CEO Jakob Stausholm said in a statement.
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