Rio Tinto to become third-largest lithium producer with $6.7 bln Arcadium buy

Rio Tinto said on Wednesday it will acquire Arcadium Lithium in an all-cash transaction, valued at $6.7 billion, in a deal that will make it the world's third-largest lithium producer.

Rio Tinto will acquire the United States-based lithium producer for $5.85 per share, it said. The deal represents a 90% premium to Arcadium's closing price of $3.08 per share on October 4, the day Reuters exclusively reported on a potential deal between the two firms.

Rio would gain access to lithium mines, processing facilities and deposits across four continents to fuel decades of growth, as well as a customer base that includes Tesla, BMW and General Motors.

"We are confident that this is a compelling cash offer that reflects a full and fair long-term value for our business and de-risks our shareholders’ exposure to the execution of our development portfolio and market volatility," Arcadium Lithium's CEO Paul Graves said in a statement.