Rio Tinto has submitted an offer, both companies said in separate statements on Monday, without giving financial details. “The offer is non-binding and there is no certainty that a transaction will materialize or proceed,” Rio said. The confirmation of the offer follows weeks of speculation about a deal that could make the company one of the largest lithium suppliers in the world. Reuters exclusively reported on Friday that the companies were in talks and Arcadium could be valued at $4 billion to $6 billion or more.
Arcadium shareholder Blackwattle Investment Partners called the move “opportunistic” and said an offer of between $4 billion and $6 billion would “significantly undervalue” the company. The recent collapse in lithium prices, driven in part by Chinese oversupply, has sent Arcadium’s shares down more than 50 percent since January and made the company an attractive takeover target.
Rio Tinto’s move comes amid growing demand for critical minerals for the global energy transition. Lithium is used, for example, for battery cells Electric cars needed. If successful, Rio Tinto could become the third largest lithium supplier in the world after Albemarle and SQM.
With the acquisition of Arcadium, Rio Tinto would expand its portfolio to include lithium assets on four continents and gain access to customers such as Tesla, BMW and received GM. The group is already one of the largest producers of copper, iron ore and other metals.