Rio Tinto to buy chemical firm Arcadium Lithium in deal worth billions

Rio Tinto is set to acquire the chemical producer Arcadium Lithium in a $6.7bn (£5.12bn) deal.

The multinational mining behemoth announced the all-cash transaction this morning and called the acquisition of the global business a “significant step forward”.

It amounts to $5.85 per share, and a premium of 90 per cent on Arcadium’s closing price of $3.08 per share on 4 October, Rio Tinto said.

Arcadium’s capabilities include lithium chemical manufacturing and extraction processes, hard-rock mining, conventional brine extraction and direct lithium extraction. 

It produces around 75,000 tonnes of lithium carbonate equivalent, with capacity set to double by the end of 2028.

Around 2,400 employees are based across Argentina, Australia, Asia, North America and the UK.

Rio Tinto chief executive Jakob Stausholm said: “Acquiring Arcadium Lithium is a significant step forward in our long-term strategy, creating a world-class lithium business alongside our aluminium and copper operations to supply materials needed for the energy transition. 

“Arcadium Lithium is an outstanding business and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio. 

“We look forward to building on Arcadium Lithium’s contributions to the countries and communities where it operates, drawing on the strong presence we have in these regions.” 

And Arcadium Lithium chief Paul Graves said: “We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility. 

“This agreement with Rio Tinto demonstrates the value in what we have built over many years at Arcadium Lithium and its predecessor companies.

“We are excited that this will give us the opportunity to accelerate and expand our strategy, for the benefit of our customers, employees, and the communities in which we operate.”

The transaction has been unanimously approved by both the Rio Tinto and Arcadium Lithium boards of directors, and is expected to close in mid-2025 subject to shareholder approval.