Mining giant Rio Tinto acquires U.S. Akadim Lithium Company for $6.7 billion in cash

Rio Tinto announced that it will acquire Arcadium Lithium in an all-cash deal of $5.85 per share, which is valued at approximately $6.7 billion.

Rio Tinto said the deal will include Akadim Lithium's world-class, complementary lithium business in its portfolio, establishing its global leadership in energy transition commodities ranging from aluminum and copper to high-grade iron ore and lithium.

Arcade Lithium is a global vertically integrated lithium chemical producer with lithium chemical manufacturing and extraction process capabilities, including hard rock mining, conventional brine extraction and direct lithium extraction.

Rio Tinto said in a statement that the company currently has an annual production capacity of 75,000 tons of lithium carbonate equivalent for a range of products such as lithium hydroxide and lithium carbonate, and has formulated expansion plans to more than double production capacity by the end of 2028. Arcade Lithium's global business includes factories and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom and the United States, with approximately 2,400 employees.

Rio Tinto said it is confident in the long-term prospects of lithium and expects the compound annual growth rate of lithium demand to exceed 10% by 2040, resulting in supply shortages.

Jakob Stausholm, CEO of Rio Tinto, said: "The acquisition of Acadim Lithium is an important step forward in Rio Tinto's long-term strategy to create a world-class lithium business in addition to our leading aluminum and copper businesses., providing the materials needed for the energy transformation. Arcade Lithium is an outstanding company, and we will use our scale, development capabilities and financial strength to give full play to the potential of its primary investment portfolio. This is a counter-cyclical expansion that is consistent with our rigorous capital allocation framework and increases our exposure to high-growth, attractive markets at the right moment in the cycle."

Paul Graves, CEO of Arcade Lithium, added: "We believe this is an attractive cash offer that reflects the complete and fair long-term value of our business and reduces the risk our shareholders take due to the execution of our development portfolio and market fluctuations."

The transaction is subject to regular regulatory approval and meets other transaction conditions and is expected to be completed in mid-2025.