| Key Points: – Rio Tinto is acquiring Arcadium Lithium in an all-cash deal worth $5.85 per share, a 90% premium over Arcadium’s recent stock price. – Arcadium’s lithium production capacity is set to more than double by 2028, positioning it for growth in the rising lithium market. – The acquisition strengthens Rio Tinto’s role in energy transition commodities, with long-term lithium demand expected to grow 10% annually through 2040. |
Arcadium Lithium (NYSE: ALTM) announced that it has entered into a definitive agreement to be acquired by global mining giant Rio Tinto in an all-cash transaction valued at $5.85 per share. The deal represents a 90% premium over Arcadium’s October 4 closing price of $3.08, highlighting the significant value Rio Tinto sees in Arcadium’s assets and growth potential.
Arcadium, a rapidly growing, vertically integrated lithium chemicals producer, currently boasts a production capacity of 75,000 tonnes of lithium carbonate equivalent, with plans to more than double that by 2028. Rio Tinto’s acquisition of Arcadium strengthens its portfolio in energy transition commodities, establishing it as a leader in the fast-growing lithium market.
The transaction is expected to unlock additional growth for Arcadium by leveraging Rio Tinto’s global expertise, scale, and resources. Arcadium’s Tier 1 assets, which include high-margin operations and an attractive suite of growth projects, will benefit from Rio Tinto’s capacity to accelerate their development. The long-term outlook for lithium demand is robust, with annual growth projected at 10% through 2040, providing a solid foundation for future expansion.
Despite falling lithium carbonate prices, driven by oversupply from China, the acquisition reflects Rio Tinto’s confidence in the long-term value of Arcadium’s business. The deal is subject to customary regulatory approvals and shareholder consent.
