November 24, 2024: Australia’s Sayona Mining will buy US-based Piedmont Lithium, it was announced this week, in an all-stock deal that will consolidate its Canadian operations and strengthen its exposure to the North American EV sector. This should create a lithium company with a market cap of $623 million

The deal is a reflection of ultra-tough conditions as the market continues to struggle from a decline in EV sales.

Under the transaction, the two companies will merge to create a North American hard rock lithium producer with Sayona becoming the parent entity. Sayona is paying a 6% premium for Piedmont, based on its closing share prices earlier this week.

Following separate capital raisings by each company, the combined entity will have an estimated pro-forma market capitalisation of $623 million, with shareholders of the two companies owning it approximately evenly, the companies said.

“We are excited about the opportunities this merger presents to accelerate our growth plans and enhance our strategic flexibility,” Sayona CEO Lucas Dow said in a statement.

The companies already have a joint venture in Quebec, North American Lithium, which finished ramping up in June and is targeting 226,000 tonnes a year of spodumene concentrate production, of which it will sell half to Piedmont.

Piedmont Lithium’s president and CEO, Keith Phillips, said: “This merger combines two complementary businesses and will create a larger and stronger company. The merger financing will enable us to weather the current industry downturn while making intelligent investments in our growth projects to be positioned for the recovery in lithium markets that we expect in the medium-term.”