Piedmont Lithium and Sayona Mining have entered into a definitive agreement to combine their businesses to form a lithium company, leading to Sayona becoming the ultimate parent company (MergeCo).
The transaction will see an equal split in equity holdings between Piedmont and Sayona shareholders, each obtaining approximately 50% of MergeCo immediately after the deal's conclusion.
To support this merger, Piedmont has announced a proposed capital raise of A$27m ($17.57m), while Sayona is set to raise A$40m.
Following completion of the deal, Sayona will also carry out a conditional placement worth A$69m in MergeCo to Resource Capital Fund VIII.
This placement is contingent upon the transaction's completion, approval from Sayona's shareholders and other conditions.
The combined equity raisings, amounting to roughly $99m, are intended to position MergeCo favourably for accelerated growth within its expanded portfolio.
The merger is subject to the approval of shareholders from both companies and is due to be finalised in H1 2025.
The merger is expected to create a more streamlined lithium business. The new entity will be strategically poised for growth across various market cycles, stated the companies.
Moreover, the merger is projected to deliver scale, optimisation and growth potential by creating the “largest” producer of hard rock lithium in North America.
Piedmont Lithium president and CEO Keith Phillips said: “This merger combines two complementary businesses and will create a larger and stronger company.
“MergeCo will be North America’s largest lithium producer and will have an attractive growth profile with three DFS [definitive feasibility study]-stage development projects and an exciting near-term brownfield expansion opportunity at NAL.
“The merger financing, corner-stoned by leading mining private equity group RCF, 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.”
In February this year, Piedmont Lithium agreed to sell a 1.15 billion-share stake in Sayona Mining for A$59.9m.
