Nutrien Ltd and Tianqi Lithium Corporation announced today that they have signed an agreement, whereby Tianqi Lithium has agreed to purchase 62,556,568 “A shares” of Sociedad Química y Minera de Chile SA (SQM) held by Nutrien for consideration of $65 per share in cash. The announced transaction represents the entirety of Nutrien’s “A shares” at a gross valuation of approximately $4.07 billion.
SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilisers and industrial chemicals. Nutrien still retains ownership of 20,166,319 SQM “B shares” and expects to divest these shares in due course.
“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,” commented Chuck Magro, Nutrien’s President and CEO.
Vivian Wu, President of Tianqi Lithium, commented, “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”.
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 subject to customary closing conditions, including regulatory approvals and Tianqi Lithium shareholder approval, and is expected to be completed by the fourth quarter of this year.