- Orocobre Limited (ORL) and Galaxy Resources have entered into a binding Merger Implementation Deed
- The two companies will merge with Orocobre acquiring 100 per cent of the shares in Galaxy
- The merger creates the fifth-largest global lithium chemicals company
- Galaxy shareholders will receive 0.569 Orocobre shares for each Galaxy share held
- Orocobre stock is up 7.74 per cent on the day, with shares of the company trading at C$6.40 at 12:00 pm ET
Orocobre Limited (ORL) and Galaxy Resources have entered into a binding Merger Implementation Deed.
Under terms of the agreement, the two companies will merge "via a Galaxy Scheme of Arrangement pursuant to which Orocobre will acquire 100 per cent of the shares in Galaxy."
The merger is valued at approximately AUD$4 billion, and creates the fifth-largest global lithium chemicals company.
The agreement stipulates Galaxy shareholders will receive 0.569 Orocobre shares for each Galaxy share held at the Scheme of Arrangement record date. Upon implementation of the scheme, Orocobre shareholders will own 54.2 per cent of the fully diluted share capital of the combined entity and Galaxy shareholders will own the remaining 45.8 per cent.
The Scheme of Arrangement is unanimously recommended by the board of Galaxy.
The scheme is also endorsed and supported by the board of Orocobre, subject to no proposal for Orocobre emerging.
A new name for the merged entity will be selected in at a future date, which will have its head office in Buenos Aires, Argentina, a corporate headquarters on the Australian East Coast and an office in Perth.
"The logic of this merger is compelling. Both Orocobre and Galaxy shareholders, will benefit from the diversification, growth and scale of a top five global lithium chemicals company. I take this opportunity to re-iterate the group's ongoing commitment to the principles of delivering the highest level of transparency of our environmental, social and governance performance, the foundations upon which our assets have and will continue to be developed," said Orocobre Chairman Robert Hubbard.
Orocobre stock is up 7.74 per cent on the day, with shares of the company trading at C$6.40 at 12:00 pm ET.