Galaxy and Orocobre to merge in a A$4B deal, establishing top 5 lithium company
(Kitco News) - Orocobre (ASX:ORE, TSX:ORL) and Galaxy Resources (ASX:GXY) announced that they have entered into a binding Merger Implementation Deed under which the two companies will merge via a Galaxy Scheme of Arrangement pursuant to which Orocobre will acquire 100% of the shares in Galaxy.
Galaxy shareholders will receive 0.569 Orocobre shares for each Galaxy share held at the Scheme record date. Upon implementation of the Scheme, Orocobre shareholders will own 54.2% of the fully diluted share capital of the combined entity and Galaxy shareholders will own the remaining 45.8%.
According to the statement, this merger creates the 5th largest global lithium chemicals company with a diversified production base and exciting growth platform, with potential to unlock significant synergies and realise value to be shared by all shareholders.
The companies noted that the merged entity's growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium. The merger consolidates the combined group’s position in Argentina.
A new name for the merged entity will be selected in due course representing the global reach of the new entity, which will have its head office in Buenos Aires, Argentina, a corporate headquarters on the Australian East Coast and an office in Perth.