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Rio Tinto’s Big Bet on Arcadium Lithium – Merger Arbitrage Mondays

  • October 14, 2024

Arcadium Lithium plc (ALTM): $5.56

Market Cap: $5.98 B

Deal Size: $6.7 B

Rio Tinto Group (RIO) announced on October 9, 2024, that it will acquire Arcadium Lithium in an all-cash deal valued at $6.7 billion, positioning itself as the world’s third-largest lithium producer, behind Albemarle (ALB) and SQM (SQM). Under the terms of the agreement, Rio Tinto will acquire the U.S.-based lithium producer for $5.85 per share, representing a 37.97% premium over the stock’s last closing price.

This acquisition presents Rio Tinto with an opportunity to solidify its presence in the lithium industry amid a slump in prices for the ultralight metal, which is essential for electric vehicle batteries. Lithium demand is forecasted to surge later this decade, driven by the growing demand for lithium-ion batteries. Lithium prices have fallen since January—impacted by weaker-than-expected electric vehicle sales and an oversupply from China.

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