9th Oct 2024 09:01
(Alliance News) - Rio Tinto PLC on Wednesday said it has agreed to buy Arcadium Lithium PLC, creating a "global leader in energy transition commodities".
The deal values the lithium producer at USD6.7 billion, London-based metals processing and mining company Rio said.
Rio will pay USD5.85 in cash per share, a 90% premium to New York-listed Arcadium's closing price of USD3.08 at the end of last week.
Arcadium Lithium shares were jumped 30% to USD5.52 each in pre-market trading in New York on Wednesday, while Rio Tinto shares were 0.5% lower at 5,016.90 pence each in London.
The deal is expected to close in mid-2025.
Rio Tinto Chief Executive Officer Jakob Stausholm said: "Acquiring Arcadium Lithium is a significant step forward in Rio Tinto's long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio. 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."
Arcadium CEO Paul Graves said: "This agreement with Rio Tinto demonstrates the value in what we have built over many years at Arcadium Lithium and its predecessor companies, and we are excited that this transaction will give us the opportunity to accelerate and expand our strategy, for the benefit of our customers, our employees, and the communities in which we operate."
Rio Tinto had announced a possible approach for Arcadium on Monday.
Arcadium has assets in nations including Argentina, the US and China. It operates from offices in Buenos Aires, Philadelphia, and Shanghai.
By Tom Budszus, Alliance News slot editor
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