Arcadium Lithium (ALTM) saw its stock price soar on Wednesday following Rio Tinto’s (RIO) announcement of a $6.7 billion all-cash acquisition deal. The company has agreed to purchase Arcadium Lithium at $5.85 per share. This move expands Rio Tinto’s access to lithium, a crucial component in electric vehicle batteries.

Rio Tinto’s Expansion into Lithium

Rio Tinto’s CEO, Jakob Stausholm, described the acquisition as a ‘counter-cyclical expansion.’ This strategic purchase allows the company to integrate lithium business with their existing aluminium and copper operations, crucial for the energy transition.

Impact on Arcadium Lithium Stock

Following the announcement, shares of Arcadium Lithium surged 31% in premarket trading to $5.54, marking its highest point since March. Although Rio Tinto’s American depositary receipts saw a slight drop of 1.5%, its strategic acquisitions could strengthen its market position.

Shareholder Approval and Market Reactions

The acquisition, expected to close by mid-2025, is contingent upon approval from Arcadium’s shareholders. The market has responded positively to the deal, spurred by recent speculation about Rio Tinto’s interest in the lithium sector.

Background of Arcadium Lithium

Formed less than a year ago from the merger of smaller companies Allkem and Livent, Arcadium Lithium has quickly become a significant player in the lithium market.

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