Orocobre Ltd agreed to acquire rival Australian miner Galaxy Resources Ltd, creating a $3 billion miner, according to The Wall Street Journal. The all-stock deal creates the fifth-largest global lithium miner.
Based on the companies’ closing share prices on Friday, a combined company would have a market value of 3.96 billion Australia dollars, or $3.06 billion
The deal comes when lithium prices are surging on concerns of shortages and a bigger-than-expected electric-vehicle boom.
Orocobre will acquire all of the shares in Galaxy, whose shareholders will get 0.569 Orocobre shares for each of their own stock.
Orocobre shareholders will own 54.2% of the combined group and Galaxy shareholders will own the remaining 45.8%.
Galaxy Chairman Martin Rowley will become non-executive chairman of the combined group while Orocobre Chief Executive Martín Pérez de Solay will become CEO.
The Orocobre-Galaxy deal is expected to give the entities geographical and product diversification, including across brine and hard-rock types of lithium production.
Orocobre and Galaxy stocks are currently gaining. ORE: ASX is up 5.65%, GXY: ASX is up 6.09%
