The $4.1 Billion Lithium Deal That is Flying Under the Radar of U.S. Regulators

On May 17, 2018, a $4.1 billion cross-border deal was announced that may impact significantly the technology industry, but the deal has…

Salar brines located in the Salar de Atacama, Chile.

On May 17, 2018, a $4.1 billion cross-border deal was announced that may impact significantly the technology industry, but the deal has mostly flown under the radar in the United States. What is at stake is the future of lithium, which is critical for the batteries that power our portable electronic devices and electric vehicles, grid storage devices and other applications.

Lithium supply security has become a top priority for technology companies in the United States and Asia. Yet in recent years China has come to dominate the lithium-ion industry, and this transaction represents another strategic step by China towards dominating this market.

In this case, Tianqi Lithium (“Tianqi”), a Chinese company, is paying $65 per share, a roughly 15% premium over market share price, to acquire from Nutrien, a U.S.-listed Canadian company, its “A shares” in SQM, a U.S.-listed Chilean company and one of the world’s biggest lithium producers.

The tr…