Tesla battery supplier Contemporary Amperex Technology Co Ltd (CATL) has announced plans to buy Canada’s Millennial Lithium Corp for a total of $377 million CAD ($298.7 million USD).
In a press release, Millenial Lithium says it has entered into a definitive arrangement agreement on September 28 with the world’s largest EV battery manufacturer that will see CATL acquire all of the outstanding shares of Millennial Lithium at $3.85 CAD ($3.05 USD) per common share, payable in cash.
The Canadian company accepted CATL’s offer, which outweighed rival company Ganfeng Lithium Co Ltd’s $3.60 CAD ($2.85 USD) per share. CATL also agreed to reimburse Millenial Lithium for the termination fee of $10 million (USD) it had paid to Ganfeng. The CATL Arrangement was already unanimously approved by Millennial Lithium’s Board of Directors.
“Subject to certain conditions, including the parties obtaining the requisite regulatory approvals, the CATL Arrangement is expected to close in the fourth quarter of 2021 or in January 2022.”
Millenial Lithium press release
The Canadian mining company has two lithium mining projects (Pastos Grandes Project and Cauchari East Lithium Project) in Argentina, a country that’s part of South America’s so-called “Lithium Triangle,” which also includes Bolivia and Chile. The “Lithium Triangle” holds more than 75% of the world’s lithium supply.
The outright acquisition of the lithium miner by CATL comes after it purchased stakes in another Argentina-focused lithium company, Neo Lithium Corp, as well as in Greenland-focused North American Nickel and Australia’s Pilbara Minerals. These transactions are clear signs that CATL is looking to secure its supply of key battery ingredients.
The deal also comes as prices for battery-grade lithium carbonate (AM-995C-LTCB) in China have more than tripled so far this year as EV demand recovers after the pandemic.
Earlier this year, CATL extended its battery supply deal with Tesla, agreeing to supply lithium-ion batteries to the US company from January 2022 through December 2025.
CATL currently provides batteries for base Model 3 vehicles made in China and cells for Tesla’s lithium-iron-phosphate (LFP) battery pack fitted to the Chinese-made Model 3 Standard Range Plus.