Before signing the deal, Millennial Lithium had scrapped the arrangement agreement it had with CATL
Canadian development-stage company Lithium Americas has signed an agreement with Millennial Lithium to acquire the latter in a stock and cash deal worth around $400m.
Millennial Lithium, which is based in Canada, is the owner of the Pastos Grandes lithium brine project in Argentina.
Lithium Americas’ assets are located in Jujuy, Argentina and Nevada in the US. Its Caucharí-Olaroz lithium project is approximately 100km away from the Pastos Grandes project.
Lithium Americas president and CEO Jonathan Evans said: “This transaction is a rare opportunity to add a complementary lithium brine project and leverage our expertise developing Caucharí-Olaroz as the largest new lithium carbonate operation to come online in over 20 years.
“We are confident Pastos Grandes can provide significant value for all shareholders as we execute on our growth strategy in the region over the coming years.”
As per the terms of the deal, shareholders of the publicly-listed Millennial Lithium will get C$4.7 ($3.73) per share in the form of Lithium Americas’ shares plus C$0.001 ($0.00079) in cash per share.
The stock component of the consideration will give Millennial Lithium’s shareholders a stake of around 9.1% in Lithium Americas. The deal is the result of an “unconditional” offer made by Lithium Americas to the former earlier this month.
Before signing the deal, Millennial Lithium scrapped the arrangement agreement it entered into with Contemporary Amperex Technology (CATL) in September this year. CATL had offered to acquire the company in a deal worth C$377m ($299m).
Millennial Lithium president and CEO Farhad Abasov said: “Millennial’s board and management believe that the LAC Arrangement Agreement provides significant value to Millennial Shareholders. The high premium to the CATL Arrangement Agreement highlights the quality of the Pastos Grandes project and the efforts by the Millennial team over the past four years.
“Lithium Americas brings significant technical expertise and financial flexibility de-risking the development of Pastos Grandes and generating further upside for Millennial Shareholders.”
The deal, which is subject to Millennial Lithiums shareholders’ approval, regulatory approvals, and other conditions, is anticipated to close in January 2022.