Rio Tinto confirms bid for Arcadium Lithum
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The news: Mining giant Rio Tinto has confirmed it has approached dual-listed lithium producer Arcadium Lithium for a potential acquisition.
The numbers: Rio said its approach is non-binding and did not disclose the value of its potential bid. Media reports earlier said a deal could be valued between USD4 billion ($5.9 billion) to USD6 billion, citing sources.
New York-listed Arcadium shares surged more than 35% in after-hours trading. Arcadium’s ASX-listed shares closed at $4.18 on Friday.
The context: A deal to acquire Arcadium would make Rio the third-largest producer of lithium in the world. Demand for the metal is expected to surge later this decade amid growing use of lithium-ion batteries for electric vehicles and consumer electronics. Rio would gain access to lithium mines, processing facilities and deposits across four continents, as well as a customer base that includes Tesla, BMW and General Motors. Rio said there is no certainty that a transaction will be agreed or will proceed.
Arcadium was formed last year through the merger of Australian producer Allkem and its US peer Livent. Shares in the company are down more than 60% so far this year amid a slump in lithium prices, making it an attractive takeover target.
The source: ASX
