Bacanora Lithium snapped up by China’s Ganfeng in $265 million deal

London-listed Bacanora Lithium is set to be acquired by Chinese battery chemicals giant Ganfeng Lithium after receiving an offer totalling US$264.5 million for the shares Ganfeng doesn’t already own.

Ganfeng raised its stake in Bacanora up to 28.88% as recently as February, but the latest offer for the remaining shares at 67.5 pence each represents a near 50% premium on Bacanora’s Wednesday close.

Bacanora’s independent directors said the unofficial offer was attractive, adding they plan to recommend it once it becomes a formal proposal, which requires approval from the Chinese authorities.

The deal is the latest to materialise in the lithium market, propelled by sharply rising lithium prices since the beginning of 2021. The biggest transaction came last month when Orocobre acquired Australia’s Galaxy Resources in a $1.4 billion deal.

Benchmark Mineral Intelligence estimates that lithium prices in China have jumped more than 100% so far this year, on the back of an expected demand increase from the electric vehicles (EVs) sector.

Ganfeng, which already has a 50% stake in Bacanora’s Sonora project in Mexico, holds interests in mines in Australia, Argentina and Canada and around 70,000 tonnes of lithium carbonate equivalent of annual conversion capacity in China.