Sayona Mining to Acquire Piedmont Lithium in an All-Stock Deal, Creating Lithium Giant

Australian mining company Sayona Mining is all set to acquire US-based Piedmont Lithium in an all-stock deal, the company announced on November 19. They will together form a combined entity that will strengthen a foothold in the North American electric vehicle (EV) market.

The two companies will merge, with Sayona becoming the parent company. Sayona is offering a 6% premium on Piedmont's closing share price on Monday, implying an all-stock transaction. The merged company will boast an estimated pro-forma market capitalization of $623 million with roughly equal ownership for both sets of shareholders.

The combined entity will benefit from a strengthened presence in North America, a key region for EV adoption. Notably, it will gain control of North American Lithium (NAL), a Quebec-based joint venture with a production capacity of 226,000 metric tons of spodumene concentrate annually.

The merger is also a response to the current challenges in the lithium market, characterized by oversupply and slower-than-expected EV adoption. By combining resources and achieving economies of scale, the merged company aims to build resilience and navigate these market conditions.

Piedmont Lithium brings valuable assets to the table, including existing customer relationships with companies like South Korea's LG Chem. Additionally, the company holds promising projects in North Carolina and Ghana.

Piedmont Lithium’s President and Chief Executive Officer, Keith Phillips said, “MergeCo will be North America’s largest lithium producer and will have an attractive growth profile with three DFS-stage development projects and an exciting near-term brownfield expansion opportunity at NAL. The merger financing, corner-stoned by leading mining private equity group RCF, will enable us to weather the current industry downturn while making intelligent investments in our growth projects. MergeCo will be domiciled in Australia, but will maintain a listing on Nasdaq and a strong commitment to our Carolina Lithium project and our U.S. headquarters in Belmont, North Carolina.”

Sayona’s Chief Executive Officer and Managing Director, Lucas Dow said, “This merger marks a transformative step for Sayona and Piedmont, creating a leading North American lithium producer with the scale and capabilities to meet the growing demand for lithium products. We believe our combined resources and expertise will enable us to deliver significant value to our shareholders and stakeholders. We are excited about the opportunities this merger presents to accelerate our growth plans and enhance our strategic flexibility.”

This merger follows Rio Tinto's $6.7 billion bid for Arcadium Lithium last month, suggesting a trend of consolidation within the lithium sector.

By joining forces, Sayona and Piedmont aim to accelerate growth, enhance strategic flexibility, and position themselves as key players in the global lithium supply chain.