Sayona and Piedmont Lithium merger to create $931m company
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The news: ASX-listed lithium producers Sayona and Piedmont Lithium have agreed to merge, with Sayona to be the parent entity.
The numbers: The merger will result in a 50:50 equity holding of the two company's shareholders in the new company. Sayona and Piedmont will each undertake a capital raise of about $40 million.
Sayona will also undertake a conditional placement for $69 million in the merged entity to Resource Capital Fund (RCF) VIII upon completion of the transaction. The equity raises aim to ensure the merged entity is positioned to accelerate growth.
When the transaction closes, the merged entity will also consider undertaking a capital raise of about $22.5 million to eligible non-institutional shareholders.
The merged entity will have a market capitalisation of around $931 million.
The context: Completion of the transaction is expected to close in the first half of 2025 subject to shareholder and regulatory approvals.
While Sayona is to be the parent entity it will be rebranded, and Sayona managing director and chief executive Lucas Dow will be the managing director and CEO of the merged entity. Piedmont president and CEO Keith Phillips will be a strategic adviser for a transition period of up to six months.
What they said: “This merger marks a transformative step for Sayona and Piedmont, creating a leading North American lithium producer with scale and capabilities to meet the growing demand for lithium products,” Dow said.
Phillips said: “The merger financing, corner-stoned by leading mining private equity group RCF, will enable us to weather the current industry downturn while making intelligent investments in our growth projects to be positioned for the recovery in lithium markets that we expect in the medium-term. MergeCo will be domiciled in Australia, but will maintain a listing on Nasdaq”.
The source: ASX announcement
