05/12/2013 - 15:50

Rockwood to acquire JV stake in Talison

05/12/2013 - 15:50

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Global chemical manufacturer Rockwood Holdings is set to acquire a 49 per cent stake in Perth-based Talison Lithium, just less than a year after its proposed $700 million takeover bid for the miner collapsed.

Rockwood to acquire JV stake in Talison
Mining activities at Talison's Greenbushes operation, south of Perth.

Global chemical manufacturer Rockwood Holdings is set to acquire a 49 per cent stake in Perth-based Talison Lithium, just less than a year after its proposed $700 million takeover bid for the miner collapsed.

Talison accepted an $823 million takeover proposal from China’s Chengdu Tianqi Industry Group in December last year, breaking its existing takeover agreement with Rockwood.

However Rockwood now appears set to gain a 49 per cent stake in the miner, announcing this week it had entered into a joint venture ownership agreement with Tianqi.

Rockwood will provide to the joint venture a two-year secured loan of up to $US670 million and will grant Tianqi a three-year call option to invest up to 30 per cent in the equity of its European lithium business. 

Rockwood and Tianqi will contribute to the joint venture equity of $US196 million and $US204 million, respectively.

The transaction is expected to close early next year, subject to regulatory approvals.

"With this acquisition, we have secured access to another significant lithium reserve, in addition to our current resources in the US and Chile," Rockwood chief executive Seifi Ghasemi said.

"Further, not only does this complement our core lithium business, but it also meets with all of our prior stated financial and strategic objectives for allocation of capital in a disciplined manner to enhance economic value for our shareholders."

Talison mines and processes lithium bearing mineral spodumene at its Greenbushes operations south of Perth.

Law firm Allens advised Tianqi on the joint venture transaction, led by partners Guy Alexander and Marcus Clark.

"It was very pleasing to work with Tianqi on another major strategic transaction," Mr Alexander said.

Messrs Alexander and Clark also advised Tianqi on its acquisition of Talison late last year.

Clifford Chance advised Rockwood on the proposal, led by Perth-based partner Michael Lishman and Frankfurt-based partner Arndt Stengel.

"We are delighted to have advised Rockwood on this complex and challenging deal," Mr Lishman said.

"We advised on two transactions spanning four continents, from instruction to announcement in just over one month; this would not have been possible without our global team working seamlessly round the clock for our client."

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