Rio Tinto to Acquire Arcadium Lithium in $6.7 Billion Deal

Rio Tinto announces a definitive agreement to acquire Arcadium Lithium for $6.7 billion, enhancing its position in energy transition commodities and expanding its lithium portfolio.

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Rio Tinto and Arcadium Lithium plc have announced a definitive agreement under which Rio Tinto will acquire Arcadium in an all-cash transaction valued at approximately $6.7 billion. The acquisition aims to strengthen Rio Tinto’s position as a global leader in energy transition commodities, including aluminium, copper, iron ore, and lithium.

Rio Tinto will acquire Arcadium for $5.85 per share, representing a 90% premium to Arcadium’s closing price of $3.08 per share on 4 October 2024, and a 39% premium to the company’s volume-weighted average price since its inception on 4 January 2024.

The transaction brings Arcadium’s world-class lithium business into Rio Tinto’s portfolio, enhancing its capabilities in supplying materials essential for the global energy transition. Arcadium is a fast-growing, vertically integrated lithium chemicals producer with long-life, low-cost operations. Its current annual production capacity is 75,000 tonnes of lithium carbonate equivalent, with plans to more than double capacity by the end of 2028. The company operates facilities and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom, and the United States, employing approximately 2,400 people.

The acquisition aligns with Rio Tinto’s long-term strategy and disciplined capital allocation framework, increasing exposure to the high-growth lithium market at a strategic point in the commodity cycle. Rio Tinto’s scale, project development capabilities, and financial strength are expected to unlock the full potential of Arcadium’s Tier 1 resource base, positioning Rio Tinto as one of the leading lithium producers globally.

The combined entity will benefit from complementary footprints and expertise, particularly in Argentina and Quebec, with opportunities for shared skillsets and cost reductions. Jakob Stausholm, Chief Executive Officer of Rio Tinto, said:

“Acquiring Arcadium Lithium is a significant step forward in our long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. We will bring our scale, development capabilities, and financial strength to realize the full potential of Arcadium’s Tier 1 portfolio.”

Paul Graves, CEO of Arcadium Lithium, commented:

“We are confident that this is a compelling cash offer that reflects full and fair long-term value for our business. This agreement demonstrates the value in what we have built over many years, and we are excited that this transaction will allow us to accelerate and expand our strategy for the benefit of our customers, employees, and the communities in which we operate.”

Transaction Details

  • The transaction has been unanimously approved by the Boards of Directors of both companies.
  • It will be implemented by way of a Jersey scheme of arrangement and is expected to close in mid-2025.
  • Key conditions include approval by Arcadium Lithium shareholders and the Royal Court of Jersey, as well as customary regulatory approvals.

Source: Rio Tinto

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