Chinese battery maker Contemporary Amperex Technology Co. (CATL) said on Wednesday it has agreed to acquire Canada's Millennial Lithium Corp., as it looks to shore up supply of key ingredients for electric vehicle batteries.
The deal is the battery maker's second upstream investment this week, after AVZ Minerals said on Monday that it won funding of $240 million from a private investment firm, jointly owned by CATL, to develop a lithium and tin project in the Democratic Republic of Congo (DRC).
CATL made an offer of C$3.85 per share earlier this month, Argentina-focused Millennial Lithium said, in an all-stock cash deal worth C$376.8 million ($297.3 million). The proposal outbid July's offer of C$3.60 each by Ganfeng, one of the world's biggest producers of lithium chemicals used in EV batteries.
The Fujian-based company, which supplies to carmakers Tesla Inc and Volkswagen AG, said the acquisition is to secure a stable long-term supply of lithium.
CATL's outright acquisition of a lithium miner follows its purchase of stakes in Argentina-focused lithium company, Neo Lithium Corp, Greenland-focused North American Nickel and Australia's Pilbara Minerals.
In April, CATL said its subsidiary agreed to take a stake in China Molybdenum Co's Kisanfu mine, a major source of battery metal cobalt, in the DRC for $137.5 million.
Millennial Lithium said CATL has also reimbursed it for the termination fee of $10 million paid to Ganfeng, which had until Monday to match the higher bid but decided against it.
CATL's late charge puts the brakes on a prolific acquisition spree by Ganfeng so far in 2021, which has seen it agree to buy the remainder of Mexico-focused Bacanora Lithium as well as stakes in a lithium mine in Mali and a salt lake in China.
The deal also comes as prices for battery-grade lithium carbonate in China <AM-995C-LTCB> have more than tripled so far this year as EV demand roars back from the pandemic fallout.