Rio Tinto’s proposed $US6.7 billion ($10.78 billion) acquisition of Arcadium Lithium has received clearance from the Committee on Foreign Investment in the United States (CFIUS).
The CFIUS review, which found the transaction poses “no unresolved national security concerns”, follows the transaction obtaining requisite shareholder approvals before Christmas last year, positioning the deal to be finalised by mid-2025.
Merger control clearance has also been satisfied or waived in Australia, Canada, China, the UK and the US, with investment screening approval having been satisfied in the UK as well.
“The transaction remains subject to investment screening approvals in Australia, Canada and Italy, as well as other customary closing conditions,” Arcadium said.
First announced in October 2024, the transaction will see Rio acquire Arcadium in an all-cash transaction for $US5.85 ($9.42) per share, representing a 90 per cent premium on Arcadium’s October 4 2024 closing price of $US3.08 ($4.96) per share.
“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,” Rio Tinto chief executive officer Jakob Stausholm said of the deal in October.
The deal had synchronicities that elicited the transaction.
Both companies operate in similar jurisdictions, including Argentina where Rio Tinto is developing its Rincon lithium project – which received approval for a $2.5 billion expansion in December 2024 – and Arcadium is operating its Salar Del Hombre Muerto, Olaroz, Sal de Vida and Cauchari lithium assets.
Rio will also be able to leverage Arcadium’s multinational upstream lithium capabilities and downstream processing offerings.
If successful, the acquisition would position Rio as the world’s third largest lithium supplier, only behind Albemarle and Sociedad Química y Minera de Chile S.A. (SQM).
Luckily for Rio, as the uptake of battery electric vehicles (BEVs) increases, lithium prices are expected to follow.
The projected increase is especially welcome after the critical mineral has faced faltering prices for quite some time, primarily caused by a supply surplus and an increase in lithium supplies from countries such as China.
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