Albemarle (NYSE: ALB), a major lithium producer, has walked away from a deal that would have seen it acquire Australia-based Liontown Resources in a A$6.6 billion transaction.
In a release issued earlier today, Albemarle indicated that it had “formally withdrawn its non-binding offer,” which comes as nears the end of its exclusive due diligence process that has been ongoing for the last four weeks. In making the decision, Albemarle cited “growing complexities associated with the proposed transaction.”
“Our engagement with the Liontown team has been meaningful and productive. We appreciate the level of cooperation we have received, and we thank the entire team for their efforts. That said, moving forward with the acquisition, at this time, is not in Albemarle’s best interests,” commented Albemarle CEO Kent Masters.
The decision notably follows Hancock Prospecting Pty Ltd increasing its stake in recent weeks to 19.90% through a series of purchases on the open market. The entity officially gained status as a “substantial shareholder” on September 11, and has continuously increased its stake via open market purchases.
Hancock as of the most recent filing holds 438,248,862 shares, worth an estimated $1.2 billion at the time of writing.
Hancock is an iron ore miner, which is controlled by the richest person in Australia, Gina Rinehart. The company is said to not yet have approached Liontown, given the exclusivity period that existed with Albemarle.
“We acknowledge Albemarle’s decision. They were constructive and respectful throughout the diligence process. Notwithstanding, our position to maintain momentum on our base plan has allowed us to keep line of sight of first production from the Kathleen Valley Project in mid-2024. The Board remains focused on delivering outstanding performance and value to its stakeholders,” stated Liontown CEO Tony Ottaviano on the decision by Albemarle to walk from the transaction.
Liontown Resources currently remains halted for trading.
Information for this story was found via Albemarle, Liontown Resources and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
