Rio Tinto (RIO, Financial), the world's second-largest mining company, has received board approval for its $6.7 billion cash acquisition of Arcadium Lithium (ALTM). This strategic move aims to position Rio Tinto as a leading producer of critical battery materials.
The company announced plans to purchase Arcadium Lithium at $5.85 per share, representing a 90% premium over Arcadium Lithium's closing share price on October 4th, before Rio Tinto confirmed its bid. CEO Jakob Stausholm remarked that this acquisition is a significant step in Rio Tinto's long-term strategy, complementing its existing aluminum and copper operations crucial for the energy transition.
This acquisition is the company's largest since its $38 billion purchase of Alcan in 2007. Rio Tinto views lithium as a key growth driver in the battery metals sector, especially as low lithium prices have recently impacted stocks like Arcadium's. The transaction has received unanimous approval from both companies' boards and is expected to finalize by mid-2025.
