Tianqi Lithium buys Nutrien's A-shares in SQM $4.07 bn

Tianqi Lithium buys Nutrien's A-shares in SQM for $4.07 bn

7:11 AM, 22nd May 2018
An aerial view shows the brine pools and processing areas of the Soquimich lithium mine on the Atacama salt flat in northern Chile. © Reuters
An aerial view shows the brine pools and processing areas of the Soquimich lithium mine on the Atacama salt flat in northern Chile. © Reuters

CALGARY, CANADA/ CHENGDU, CHINA: Tianqi Lithium Corporation has signed an agreement to buy 62,556,568 "A shares" of Sociedad Quimica y Minera de Chile SA (SQM) held by Nutrien Ltd. For a consideration of $65 per share in cash. The total value of the transaction represents approximately $4.07 billion.

SQM is an integrated producer and distributor of lithium, iodine, speciality plant nutrients, potassium-related fertilizers and industrial chemicals.

Nutrien still retains ownership of 20,166,319 SQM "B shares" and expects to divest these shares in due course.

Nutrien's sale of its SQM holdings was required by the Competition Commission of India and Ministry of Commerce in China in providing their clearance for the merger of Agrium and PotashCorp which formed Nutrien. The agreement is expected to be completed by the fourth quarter of this year.

"The announced sale of the majority of our SQM holdings marks another key integration milestone for Nutrien. With growing free cash flow, combined with the significant proceeds from this sale, Nutrien further enhances our balance sheet and liquidity, and places us in a strong position to execute on our capital allocation priorities," said Chuck Magro, Nutrien's president and CEO.

"This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy. Tianqi Lithium's shareholders will greatly benefit from this transaction given SQM's long-term stable financial returns and steady dividends," added Vivian Wu, president of Tianqi Lithium.

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