Tianqi Lithium, the Chinese leading global supplier of lithium products, is acquiring a 25% stake in Chile’s lithium firm, Sociedad Química y Minera de Chile (SQM). The amount totals $4.07 billion and, according to reports, Tianqi Lithium will buy 62,556,568 ‘A shares’ of SQM for $65 per share in cash, which had been earlier held by Canadian fertilizer company Nutrien.
“The announced sale of the majority of our SQM holdings marks another key integration milestone for Nutrien. With growing free cash flow, combined with the significant proceeds from this sale, Nutrien further enhances our balance sheet and liquidity, and places us in a strong position to execute on our capital allocation priorities,” said Chuck Magro, Nutrien’s President and CEO in Nutrien’s press release.
Nutrien will be giving up all of its ‘A shares’ in SQM. The sale is a consequence of the regulatory requirement of the Competition Commission of India and Ministry of Commerce in China, in order to approve the merger of Agrium and PotashCorp, which made Nutrien. While its ‘A shares will be sold, Nutrien will still retain its 20,166,319 SQM ‘B shares’, which will be sold later, when other customary closing conditions that the agreement is subject to, such as approvals from and Tianqi Lithium shareholders and regulatory approvals, are completed by the fourth quarter of this year.
Vivian Wu, President of Tianqi Lithium, said, “This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy. Tianqi Lithium’s shareholders will greatly benefit from this transaction given SQM’s long-term stable financial returns and steady dividends”.
