Rio Tinto to Acquire Arcadium Lithium for $6.7 Billion in All-Cash Deal at 90% Premium

Oct 9, 2024, 07:03 AM

Rio Tinto, the world's second-largest mining company, has announced a definitive agreement to acquire Philadelphia-based Arcadium Lithium for $6.7 billion in an all-cash deal. The acquisition, which values Arcadium at $5.85 per share, represents a 90% premium over its share price on October 4, when news of the deal first leaked. This move is seen as a strategic bet on the future of electric vehicle (EV) battery metals, positioning Rio Tinto to become the third-largest lithium producer globally. The deal has already received approval from both companies' boards and is expected to close in mid-2025. Arcadium's vast lithium portfolio and extraction technology are key attractions for Rio Tinto, which aims to capitalize on the current low lithium prices. The acquisition has also sparked optimism that smaller lithium producers could become takeover targets, leading to a surge in the stock prices of various lithium companies, including Sociedad Quimica Y Minera and Albermarle. The merger will face regulatory reviews from bodies such as CFIUS.