Lithium salt giant's territory expands again! Tianqi Lithium intends to acquire 23.77% stake in SQM for 25.893 billion yuan
- Time of issue:2021-01-15
Lithium salt giant's territory expands again! Tianqi Lithium intends to acquire 23.77% stake in SQM for 25.893 billion yuan
(Summary description)Tianqi Lithium's acquisition of SQM shares will undoubtedly further consolidate the company's global leading position and benefit the company's long-term development. The "strong combination" of the two may have a profound impact on the global lithium supply pattern.
- Time of issue:2021-01-15
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Tianqi Lithium's acquisition of SQM shares will undoubtedly further consolidate the company's global leading position and benefit the company's long-term development. The "combination of the two" may have a profound impact on the global lithium supply pattern.
Tianqi Lithium (002466), which once acquired Talison to establish its status as a lithium salt giant, will once again expand its global footprint.
On May 18th, Tianqi Lithium issued an announcement stating that it agreed to the company and its wholly-owned Chilean subsidiary Inversiones TLC SpA and its counterparty Nutrien Ltd. and its three wholly-owned subsidiaries Inversiones RAC Chile SA, Inversiones. El Boldo Limitada and Inversiones PCS Chile Limitada (hereinafter collectively referred to as the “Nutrien Group”) signed an agreement on the proposed use of self-raised funds of approximately US$4.066 billion (according to the central parity rate of RMB exchange rate announced by the China Foreign Exchange Trading Center on May 17th) 25.893 billion yuan) to acquire 62,556,568 Class A shares (approximately 23.77% of SQM's total share capital) of Sociedad Química y Minera de Chile SA (hereinafter referred to as “SQM”) held by Nutrien Group.
According to the data, SQM owns the high-quality resources of Atacama Salt Lake, and it has almost monopolized 80% of the global brine lithium salt production with Albemarle and FMC in the United States. It is known as the three giants of lithium suppliers.
SQM is headquartered in Santiago, the capital of Chile. The current annual output of lithium carbonate in Chile is 48,000 tons, which will increase to 70,000 tons by mid-2018 and 100,000 tons in 2019. The company has branches in more than 20 countries including the United States, Belgium, Spain, Mexico, Italy, Germany, Thailand, China and South Africa, and its products are sold in more than 110 countries.
From the perspective of performance, SQM's main business has remained stable over the years, and its operating performance has grown steadily. In particular, it is worth mentioning that due to the growth of the downstream new energy automobile industry, global lithium chemical products are in short supply. In the past two years, SQM's lithium product gross profit has accounted for more than half of its gross profit. The lithium product business has become SQM's best performance growth point. According to the announcement, SQM has had a relatively high percentage of cash dividends every year in the past five years.
Industry analysis believes that Tianqi Lithium has the global high-quality lithium mineral resource Talison and high-quality large-scale lithium salt production capacity. In recent years, driven by the development of downstream new energy vehicles, its performance is very impressive, and it is no longer controversial. Of global lithium salt giants. SQM is currently the world's leading supplier of lithium products. The company's salt lake assets in Salar de Atacama, Chile, are the lithium salt lakes with the highest concentration of lithium, the largest reserves, and the most mature mining conditions in the world.
Tianqi Lithium's acquisition of SQM shares will undoubtedly further consolidate the company's global leading position and benefit the company's long-term development. The "combination of the two" may have a profound impact on the global lithium supply pattern.
Tianqi Lithium (002466) released the first quarter report of 2018, showing that the company achieved operating income of more than 1.669 billion yuan from January to March, an increase of 56.92% over the same period last year; net profit attributable to shareholders of listed companies reached 660 million yuan, This is an increase of 62.7% over the same period last year. It is estimated that the net profit attributable to shareholders of listed companies from January to June this year will be 1.3-1.45 billion yuan, an increase of 40.69%-56.93%.
Tianqi Lithium will reach a production scale of 40,000 tons of lithium chemicals in 2018, and a production scale of more than 100,000 tons in 2020.
It is worth mentioning that the fourteenth meeting of the fourth board of directors of Tianqi Lithium held on March 22 this year agreed to the company’s proposal to apply for listing on the main board of the Hong Kong Stock Exchange; it was held on April 24. The 2017 Annual General Meeting of Shareholders reviewed and approved the issuance plan.
According to IFR reports, Tianqi Lithium, which is listed in Shenzhen, plans to raise at least US$1 billion from the Hong Kong listing this year, and part of its proceeds may be used to invest in equity acquisitions.
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