Rio Tinto to Acquire Arcadium Lithium for $6.7 Billion
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Rio Tinto and Arcadium Lithium have entered into a definitive agreement where Rio Tinto will acquire Arcadium in an all-cash transaction for $5.85 per share. The transaction represents a premium of 90 percent to Arcadium’s closing price of $3.08 per share on October 4, 2024, a premium of 39 percent to Arcadium’s volume-weighted average price (VWAP) since Arcadium was created on January 4, 2024, and values Arcadium’s diluted share capital at approximately $6.7 billion.
The transaction will bring Arcadium’s world-class, complementary lithium business into Rio Tinto’s portfolio, establishing a global leader in energy transition commodities — from aluminium and copper to high-grade iron ore and lithium.
Arcadium is a global, fast-growing, vertically integrated lithium chemicals producer with an asset base of long-life, low-cost operations and growth projects. It has leading capabilities in lithium chemicals manufacturing and extraction processes, including hard-rock mining, conventional brine extraction and direct lithium extraction.
Arcadium’s current annual lithium production capacity across a range of products including lithium hydroxide and lithium carbonate is 75,000 tonnes lithium carbonate equivalent, with expansion plans in place to more than double capacity by the end of 2028.
Arcadium’s global operations, comprising approximately 2,400 employees, include facilities and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom, and the United States.
“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 realize 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,” said Rio Tinto Chief Executive Officer Jakob Stausholm.
“We look forward to building on Arcadium Lithium’s contributions to the countries and communities where it operates, drawing on the strong presence we already have in these regions. Our team has deep conviction in the long-term value that combining our offerings will deliver to all stakeholders,” added Stausholm.
“We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility. Arcadium Lithium is a leading global lithium producer with the widest offering of lithium chemical products and a world-class manufacturing network, backed by a broad technology portfolio and expertise in all aspects of the lithium value chain,” said Arcadium Lithium CEO Paul Graves.
“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,” added Graves.
The transaction has been unanimously approved by both the Rio Tinto and Arcadium Lithium boards of directors. The transaction, which will be implemented by way of a Jersey scheme of arrangement, is expected to close in mid-2025.
Rio Tinto produces aluminum, copper, diamonds, gold, industrial minerals, iron ore and uranium. They own and operate open pit and underground mines, mills, refineries, smelters, power stations, research and service facilities. They also use their own railways, ports & ships to deliver materials to the customer. They are headquartered in London, England.
Arcadium Lithium is a leading global lithium chemicals producer committed to safely and responsibly harnessing the power of lithium to improve people’s lives and accelerate the transition to a clean energy future. Arcadium Lithium collaborates with their customers to drive innovation and power a more sustainable world in which lithium enables exciting possibilities for renewable energy, electric transportation and modern life. Arcadium Lithium is vertically integrated, with industry-leading capabilities across lithium extraction processes, including hard-rock mining, conventional brine extraction and direct lithium extraction (DLE), and in lithium chemicals manufacturing for high performance applications. They have operations around the world, with facilities and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom, and the United States.
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