China’s Tianqi Lithium has entered into an agreement with Nutrien to acquire 24% stake in Chile’s SQM for $4.07bn.


Image: Lithium ingots with a thin layer of black nitride tarnish. Photo courtesy of Dnn87/Wikipedia.

The acquisition is expected to strengthen the Chinese company’s presence in the lithium market.

Under the agreement, Tianqi Lithium has agreed to purchase 62,556,568 “A shares” of Sociedad Química y Minera de Chile (SQM) held by Nutrien for consideration of $65 per share in cash.

Tianqi Lithium president Vivian Wu said: “This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy. Tianqi Lithium’s shareholders will greatly benefit from this transaction given SQM’s long-term stable financial returns and steady dividends.”

SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilizers and industrial chemicals.

The transaction is subject to customary closing conditions, including regulatory approvals and Tianqi Lithium shareholder approval.

It is expected to be completed by the fourth quarter of this year.

Nutrien’s sale of its stake in SQM holdings is part of its efforts to gain approval for the merger of Agrium and PotashCorp, which formed Nutrien, from the Competition Commission of India and Ministry of Commerce in China.

Nutrien’s president and CEO Chuck Magro said: “The announced sale of the majority of our SQM holdings marks another key integration milestone for Nutrien.

“With growing free cash flow, combined with the significant proceeds from this sale, Nutrien further enhances our balance sheet and liquidity, and places us in a strong position to execute on our capital allocation priorities.”

Tianqi Lithium is a major global supplier of lithium products, with major businesses including lithium resource development and exploitation, downstream production processing and trade for a diverse range of high quality lithium products including mineral concentrates.

The company has presence in China and Australia, which enable it to service customers across Europe, Asia, and Oceania.