19 Apr Orocobre’s $1.78 billion deal for Galaxy Resources creates 5th largest global lithium miner
Australia’s Orocobre has announced an all-stock deal for smaller domestic peer Galaxy Resources worth A$1.78 billion, creating the world’s fifth most valuable lithium producer by market capitalisation.
The merger will also establish the most valuable lithium stock on the ASX, with a A$4 million market cap. The new entity will have hard rock, brine and chemicals assets across Australia, Argentina, Canada and Japan, as global battery metals demand for the electric vehicle industry continues to grow.
Both companies have significant expansion plans, putting the merged company on track to produce more than 130,000 tonnes of lithium carbonate equivalent (LCE) with operational synergies, particularly in Argentina.
Orocobre and Galaxy have been looking to consolidate their Olaroz and Sal de Vida lithium projects located in the Argentine section of South America’s so-called ‘lithium triangle’. The merged firm will be able to take expertise from Orocobre’s Olaroz brine plant to speed up construction of Sal De Vida.
Shared technical expertise will also aid development of a chemicals business at its James Bay hard rock project in Canada, which is well positioned to supply the North American battery chemicals market.
“The transaction will allow the group to materially accelerate the development of our combined growth projects,” Galaxy CEO Simon Hay said.