Australian lithium firm Sayona Mining (ASX:SYA,OTCQB:SYAXF) and US-based Piedmont Lithium (ASX:PLL,NASDAQ:PLL) have introduced a merger settlement that will create a consolidated entity valued at roughly US$623 million.
This transfer goals to strengthen their positions within the international lithium provide chain and improve operations in North America and past.
The settlement includes an all-stock transaction, with Sayona buying Piedmont to grow to be the dad or mum firm. Underneath the phrases, present Piedmont shareholders will obtain Sayona American Depository Shares (ADS) or Sayona shares listed on the Australian Securities Change (ASX) in proportion to their holdings.
Possession of the merged firm will probably be break up roughly evenly post-merger. Shareholders of each firms are anticipated to carry equal stakes within the newly shaped entity.
The mixed portfolio of the merged entity will embrace lithium belongings throughout North America, Australia and Ghana.
The 2 firms are already companions in North American Lithium (NAL), a spodumene mining operation in Québec, Canada. Presently, Sayona holds a 75 p.c stake in NAL, with Piedmont proudly owning the remaining 25 p.c.
The merger will consolidate NAL’s possession beneath the newly shaped entity, permitting for larger operational effectivity and suppleness in securing funding or authorities help if required.
NAL started operations in early 2023 and has produced roughly 140,000 metric tons of spodumene focus since its restart. The power is focusing on an annual manufacturing charge of 226,000 metric tons. Half of its output is bought to Piedmont beneath an present offtake settlement.
Regardless of its manufacturing capability, NAL confronted monetary losses within the third quarter of 2024, reflecting the present state of the lithium market.
Sayona’s portfolio options three lithium initiatives in Québec and a collection of mining leases in Western Australia.
In the meantime, Piedmont contributes its lithium initiatives in North Carolina and Ghana, developed in partnership with Atlantic Lithium (ASX:A11,LSE:ALL,OTCQX:ALLIF).
The merger seeks to capitalize on these complementary belongings to create a extra built-in and scalable operation.
Keith Phillips, President and CEO of Piedmont, mentioned that the merger will allow the corporate to concentrate on future growth whereas adapting to lower than favorable business situations.
“The merger financing, corner-stoned by main mining non-public fairness group RCF, will allow us to climate the present business downturn whereas making clever investments in our development initiatives to be positioned for the restoration in lithium markets that we anticipate within the medium-term,” Phillips mentioned within the official announcement.
The merger determination continues an ongoing pattern within the lithium sector towards consolidation.
Latest months have seen elevated M&A exercise, notably Rio Tinto’s (ASX:RIO,NYSE:RIO,LSE:RIO) US$6.7 billion acquisition of Arcadium Lithium (NYSE:ALTM,ASX:LTM), as firms search to strengthen their market positions amid fluctuating demand and pricing dynamics.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.
Editorial Disclosure: Atlantic Lithium is a shopper of the Investing Information Community. This text just isn’t paid-for content material.
