Acquisition by Anglo-Australian miner comes despite global headwinds in electric car market
Rio Tinto is to buy the US company Arcadium Lithium for $6.7bn , in a huge bet on the energy transition despite
The Anglo-Australian metals and mining company said it would pay $5.85 a share for the US-based lithium miner. That represents an almost 90% premium to Arcadium’s closing price of $3.08 a share on 3 October, the day before news of a potential deal emerged. The acquisition would give Rio access to lithium mines, processing facilities and deposits in Argentina, Australia, Canada and the US to fuel decades of growth, as well as a customer base that includes the carmakers Tesla, BMW and General Motors.
Lithium prices have floundered because of Chinese oversupply and a slowdown in electric vehicle sales, resulting in miners of the metal emerging as attractive takeover targets. “This is a countercyclical expansion aligned with our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle,” Jakob Stausholm, the chief executive of Rio, said.The Arcadium chair, Peter Coleman, said the cash offer would provide shareholders with “certainty and liquidity” and avoid the risks associated with lithium market fluctuations.
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