We see this as a unique opportunity to unlock value for shareholders of both companies.
The transaction is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside its leading aluminium and copper operations to supply materials needed for the energy transition.
Arcadium is one of the world’s leading global lithium platforms, with diversified production and processing capabilities, a broad range of high-performance lithium products, a highly attractive suite of growth projects, and long-term blue-chip customer relationships.
Combining Rio Tinto and Arcadium’s technological leadership in lithium extraction, the transaction will position Rio Tinto to become a market leader in lithium processing.
Rio Tinto looks forward to building on Arcadium’s history of commercial excellence that includes multi-year relationships with leading OEMs and battery companies, by ensuring reliable, low cost and sustainable supply.
Further, Rio Tinto has the balance sheet strength and proven project delivery capability to execute, and, over time, accelerate the full potential of Arcadium Lithium’s Tier 1 resource base.
The transaction represents a premium of 90% to Arcadium’s closing price of $3.08 per share on 4 October 2024, a premium of 39% to Arcadium’s volume-weighted average price since Arcadium was created on 4 January 2024, and values Arcadium’s diluted share capital at ~$6.7 billion.1
Rio Tinto is confident in the long-term outlook for lithium, with more than 10% compound annual growth rate in lithium demand expected through to 2040 leading to a supply deficit.2
With lithium spot prices down >80% versus peak prices, this counter-cyclical acquisition comes at a time with substantial long-term market and portfolio upside, underpinned by an appealing market structure and established jurisdictions.
Major players in each of the part of the supply chain are seeking to secure their future sources of supply, and Arcadium Lithium will position Rio Tinto as a global leader in energy-transition commodities.
Rio Tinto has the balance sheet strength and proven project delivery capability to execute and, over time, accelerate the full potential of Arcadium Lithium’s Tier 1 resource base.
The transaction is expected to close in mid-2025. Key conditions to closing of the transaction include approval of Arcadium Lithium’s shareholders and the Royal Court of Jersey. In addition, the transaction is subject to receipt of customary regulatory approvals and other closing conditions.
Arcadium Lithium shareholders do not need to take any action at the present time. A notice of meeting and proxy statement for the required meeting of Arcadium Lithium shareholders, when available, will contain additional information regarding the transaction.
A majority in number of those Arcadium Lithium shareholders present and voting, and representing at least 75% of the voting rights of all shares voted, will be required to complete the transaction.
Full details of the terms and conditions of the transaction are set out in the transaction agreement, which may be obtained, free of charge, on the SEC's website (http://www.sec.gov) when available, and Rio Tinto’s website at https://www.riotinto.com/en/invest/exchange-releases.