Australia’s Orocobre and Galaxy Agree Merger
Australian companies Orocobre and Galaxy Resources have agreed to a “merger of equals” that they said would create the world’s fifth-largest manufacturer of lithium chemicals. The deal, valued at A$4 billion, has been unanimously approved by the boards of both companies and is expected to complete by August 2021.
Under the agreed terms, Galaxy shareholders would receive 0.569 Orocobre shares for each Galaxy share. Orocobre shareholders would own 54.2% of the combined entity, with Galaxy owners holding the remainder.
The merged entity, which will be renamed, will have its head office in Buenos Aires, Argentina, a corporate headquarters on the Australian East Coast and an office in Perth, as well as production sites in Australia, South America and Canada.
“The logic of this merger is compelling,” said Orocore chairman Robert Hubbard. “Both Orocobre and Galaxy shareholders will benefit from the diversification, growth and scale of a top-five global lithium chemicals company.”
Martín Pérez de Solvay, Orocobre’s CEO and managing director added that the merger “consolidates the combined group’s position in Argentina and will give us significant operational, technical and financial flexibility to deliver the full value of our combined portfolio.”
Orocore added that the merged group would be uniquely positioned to take advantage of robust demand for lithium into electric vehicles (EVs) in the mid-long term. According to the company, a post Covid-19 recovery and a strong desire for decreased carbon emissions is accelerating the move to EVs.
Author: Elaine Burridge, Freelance Journalist
