TIANQI Lithium Corp. will buy nearly a quarter of Chilean lithium producer SQM for US$4.1 billion, gaining it coveted access to a key ingredient in rechargeable batteries that power mobile phones and electric cars. The sale, however, still faces scrutiny by an anti-trust regulator in Chile as it would leave Tianqi just shy of a controlling stake in SQM, the world’s second-largest lithium producer, and likely entitle the company to appoint three seats on its board. Tianqi, which is already building a major lithium processor in Western Australia, will buy 62.5 million SQM A shares for US$65 each from Canada-based fertilizer company Nutrien Ltd. Tianqi’s interest comes as China aggressively promotes electric vehicles to combat air pollution and help China’s domestic carmakers leapfrog the combustion engine to build global brands. Chile’s former government in March filed a complaint with the FNE antitrust regulator, seeking to block the sale of the shares to Tianqi, alleging a potential fusion between the two lithium giants would distort the global lithium market and could give China the upper hand in a global race to secure resources for electric vehicles. Chile’s Economy Minister Jose Valente said following the announcement that the government would respect an eventual ruling by the country’s regulators on the deal. “We have strong laws on free competition. The FNE must deliberate and give its opinion with respect to [this deal] and we will abide by their decision,” Valente said. He added that the Chilean Government welcomed foreign investment and would not discriminate by nationality. The FNE has until August, with the possibility of extensions, to decide whether to launch a full investigation into the case. Nutrien CEO Chuck Magro said he was confident the deal would not trigger antitrust concerns and would be completed by the fourth quarter. (SD-Agencies) |