Rio Tinto Group (RIO) announced on October 9, 2024, that it will acquire Arcadium Lithium plc (ALTM) in an all-cash deal valued at $6.7 billion, positioning it as the world’s third-largest lithium producer.
Under the terms of the agreement, Rio Tinto will acquire the U.S.-based lithium producer in an all-cash transaction for $5.85 per share, representing a premium of 37.97% over the stock’s last close.
Arcadium Lithium is a global leader in lithium production, specializing in extracting and manufacturing lithium for electric vehicles, renewable energy, and other high-tech uses. It operates in countries like Argentina, Australia, Canada, China, Japan, the United Kingdom, and the United States.
Rio Tinto is a global mining company that explores, mines and processes a wide range of essential minerals. These include iron ore, aluminum, copper, diamonds, and lithium, which are critical for industries like renewable energy, electronics, and transportation. The company operates in 35 countries and has been in the mining industry since 1873, with headquarters in London.
A few days ago Reuters had reported that Rio was holding talks with Arcadium for a deal. Arcadium was trading at $3.08 before the initial announcement that came on October 4.
Rio would secure access to lithium mines, processing facilities, and deposits spanning four continents, ensuring decades of growth. It would also tap into a customer base that includes major players like Tesla, BMW, and General Motors.
The deal is anticipated to be finalized by mid-2025.
Rio Tinto estimates that Arcadium’s planned growth spending will make up about 5% of Rio Tinto’s total capital spending, which could be as much as $10 billion in 2025 and 2026.
Arcadium’s current EV/EBITDA (TTM) ratio is 17.84, above the sector median of 10.62.
“We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility,” Arcadium Lithium’s CEO Paul Graves said.
For an in-depth look at this M&A transaction, visit the Deal Metrics page at
Deal Metrics for the acquisition of Arcadium Lithium plc (ALTM) by Rio Tinto Group (RIO)
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Editor’s Note: Baranjot Kaur contributed to this article