China's Ganfeng agrees takeover of Bacanora Lithium in $264.5 mln deal

Credit: REUTERS/PHIL NOBLE

May 6 (Reuters) - China's Ganfeng Lithium 002460.SZ, one of the world's top lithium producers, on Thursday said it had offered to buy the shares it does not already own in Mexico-focused Bacanora Lithium BCNB.L for up to 190 million pounds ($264.5 million).

The deal, which values Bacanora at up to around 267 million pounds, follows the announcement of merger between lithium producers Galaxy Resources GXY.AX and Orocobre Ltd ORE.AX last month as demand for the key ingredient in electric vehicle batteries surges after a three-year downturn.

Bacanora's current market capitalisation is 148.67 million pounds, according to Refinitiv Eikon data.

Ganfeng, which in February announced a plan to raise its stake in Bacanora from 17.41% to 28.88%, will acquire the remaining shares in the company for 67.5 pence per share, a joint statement said. The increase in Ganfeng's stake to 28.88% is expected to complete shortly, it added.

London-listed Bacanora, which aims to start production from its Sonora lithium project in Mexico in 2023, was trading down 1.7% at 44.25 pence around noon on Thursday, about one-third lower than Ganfeng's offer price.

Jiangxi-based Ganfeng 1772.HK said in late March it planned to boost production capacity roughly fivefold to 600,000 tonnes of lithium carbonate equivalent (LCE) annually, without providing a timeframe.

($1 = 0.7184 pounds)

(Reporting by Tom Daly; additional reporting by Zandi Shabalala and Clara Denina; Editing by Kirsten Donovan)

((tom.daly@thomsonreuters.com; +86 10 5669 2119;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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