Rio Tinto Group (RIO) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition creates a world-leading, vertically integrated lithium business, positioning the acquirer as a global leader in lithium resources and production.

• Lithium is critical for the energy transition, with demand expected to grow at over 10% CAGR to 2040.

• Arcadium Lithium brings a premier growth portfolio, vertically integrated operations, and high-margin assets that align with the acquirer's long-term strategy.

• The combined entity will have a robust global footprint, especially in Argentina and Canada/Quebec, and deep customer relationships.

• The deal leverages the acquirer's scale, financial strength, and project development capabilities to unlock Arcadium's Tier 1 resource base.

Financial terms and conditions

• All-cash transaction at $5.85 per Arcadium share, valuing Arcadium at approximately $6.7 billion and representing a 90% premium to the 4 October 2024 closing price.

• The deal is unanimously approved by both boards and will be implemented via a Jersey Scheme of Arrangement.

• Funded from existing liquidity, with completion expected mid-2025, subject to shareholder, court, and regulatory approvals.

• Arcadium's projected growth capex to represent about 5% of the acquirer's group capex of up to $10 billion across 2025 and 2026.

Synergies and expected cost savings

• Significant synergies expected from combining direct lithium extraction (DLE) technologies, project delivery expertise, and supply chain optimization.

• Enhanced technological leadership and operational efficiencies through integration of DLE technology and next-generation battery applications.

• Opportunity for economies of scale and regional development in Canada and Argentina.

• Statements of estimated cost savings and synergies are forward-looking and subject to risks and uncertainties.