CATL Outbids Ganfeng for Millennial Lithium with a Cash Offering of CAD 377 Million

published: 2021-10-13 9:30 | editor: | category: News

CATL, a major Chinese battery manufacturer and EV battery supplier to Tesla, will be acquiring Canadian lithium mining company Millennial Lithium in its entirety after winning a bidding war against another Chinese battery and chemical manufacturer Ganfeng Lithium. The all-stock cash deal, which was announced at the end of this September, is worth CNY 1.92 billion (around CAD 377 million). Even though the deal has been approved by the board of Millennial, it still has to go through a shareholder vote and a regulatory review.

CATL has stated that the acquisition of Millennial Lithium is a key step in extending its coverage of the battery supply chain and ensuring that the flow of lithium supply is stable in the long run. CATL has been aggressively investing in mining projects at home and abroad. Earlier this year, one of CATL’s subsidiaries bought a 25% stake in China Molybdenum’s subsidiary KFM Holding, which owns a 95% stake in the Kisanfu cobalt mining project in the DRC.

As reported by various news agencies including Reuters and Bloomberg, Ganfeng announced its intention to acquire Millennial this July. Its bid price eventually rose to CAD 3.60 per share. Then, CATL presented its proposal this September and thereby triggered a bidding war between the two companies. Initially entering the negotiation as a “mystery” entity, CATL later revealed itself and came out on top with the offer of CAD 3.85 per share. CATL has also agreed to reimburse the termination fee of USD 10 million that Millennial was required to pay Ganfeng, which gave up matching CATL’s bid price.

Millennial is targeted by Chinese battery manufacturers because it controls a vast amount of lithium resources in Argentina. Millennial’s main business is the exploration, development, and acquisition of lithium mining projects. It currently possesses around 4.12 million MT of measured and indicated lithium carbonate equivalent. Its main assets include the Pastos Grandes and Cauchari East lithium brine projects that are respectively located in the Argentinian provinces of Salta and Jujuy. The Pastos Grandes project has a planned production capacity of 24,000MT per year for lithium carbonate.

While expanding the supply of battery metals via acquisitions of mining rights around the world, CATL is also rapidly building up EV battery production capacity in Europe. This September, CATL signed an agreement with BASF to collaborate on battery recycling and manufacturing of cathode active materials. In the same month, CATL also formally became a member of the European Battery Association. An earlier article from Nikkei Asia said that CATL, together with compatriot EV battery manufacturers Farasis Energy and SVOLT, will be spending a total of more than USD 3 billion in setting up new production facilities in Germany.

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