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Monday, April 19, 2021 - 13:04:49
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Mining News Pro - Galaxy Resources and Orocobre are planning to merge, creating the fifth largest global lithium chemicals company with a $4 billion proposal.
Orocobre is an ASX-listed company with a portfolio of lithium, potash and boron projects and facilities in Argentina.
In the 2021 March quarter, Galaxy ramped up the Mt Cattlin lithium mine in Western Australia to its full rate, producing 46,588 dry metric tonnes of lithium.
The proposed merger will deliver a stronger grip on the lithium supply chain for both companies, with Galaxy chairman Martin Rowley stating it would deliver a strong portfolio of lithium assets.
“This transaction has the potential to be a significant value- creating opportunity for Galaxy and Orocobre shareholders,” he said.
“The scheme provides shareholders of Galaxy with the opportunity to share in the significant benefits of being part of a larger diversified group and the synergies expected to be available to help enhance and progress our portfolio of world class assets.
“The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV (electric vehicle) demand for lithium.”
The merged company will have its head office in Argentina with a corporate headquarters in Perth.
Rowley will become non-executive chairman of the merged company, while Orocobre chairman Robert Hubbard will be appointed as deputy chair.
Orocobre chief executive and managing director Martin Pérez de Solay will also retain his position.
“The merger brings together assets and teams with highly complementary skills and knowledge, with a unique opportunity to create a leading independent lithium company,” Pérez de Solay said.
“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.”
The merger will be completed under a binding merger agreement, which includes Orocobre acquiring 100 per cent of Galaxy’s shares.
Galaxy’s board has unanimously recommended the scheme, which will provide the company’s shareholders with 45.8 per cent of the combined company.
“The merger with Orocobre represents an exciting opportunity for both Orocobre and Galaxy shareholders to consolidate and realise the full potential of our asset portfolios and technical capabilities,” Galaxy chief executive Simon Hay said.
“The transaction will allow the group to materially accelerate the development of our combined growth projects.”
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