Galaxy Resources’ $4 billion merger with Queensland lithium producer Orocobre will come into effect later this month after the plan was approved by the Western Australian Supreme Court today.
Galaxy Resources’ $4 billion merger with Queensland-based lithium producer Orocobre will come into effect later this month after the plan received the approval of the Western Australian Supreme Court today.
The Perth-based lithium miner announced the deal back in April, under which it would become a wholly owned subsidiary of Orocobre.
The merger is expected to create a top six global lithium company with an assets portfolio spanning four continents while enhancing the company’s liquidity and positioning it to take advantage of the anticipated rise in demand for lithium expected in the electric vehicle market.
The merged would see the new entity sit just ahead of Perth-based lithium miner Pilbara Minerals, which is worth $3.7 billion.
Under the proposed scheme of arrangement, each Galaxy shareholder will receive 0.569 shares in Orocobre for every share they hold in Galaxy.
In June, Galaxy sought orders from the Supreme Court in relation to the plan, which instructed the company to convene a meeting of its members to consider and vote on the proposed scheme.
Last Friday, Galaxy announced that 96 per cent of its shareholders had voted in favour of the proposed merger at that meeting and that it would seek the final approval of the Supreme Court on August 13.
Galaxy’s directors unanimously recommended shareholders vote in favour of the scheme, with an independent expert finding the scheme was ‘fair and reasonable’ and in the best interests of shareholders.
Supreme Court Justice Jenni Hill approved the proposed scheme of arrangement this morning and ordered the company to lodge a copy of the court's decision with ASIC.
In a statement released this afternoon, Galaxy said it intended to lodge those orders as early as Monday, at which time the scheme is expected to become legally binding.
New Orocobre shares are expected to begin trading on the ASX on a deferred settlement basis the following day, with the scheme to be implemented on Wednesday August 25.
The new entity will retain a head office in Argentina, with corporate headquarters in the eastern states and an office in Perth.
Galaxy chairman Martin Rowley will chair the merged group, while Orocbore chairman Robert Hubbard will serve as deputy. Both men, however, have confirmed they will retire within the year.
Orocobre’s Martin Perez de Solay will retain his position as chief executive, while Galaxy's Perth-based chief executive Simon Hay is expected to become president of international business.
The two companies both operate large-scale projects in northern Argentina.
Galaxy, which mines and processes lithium pegmatite ore to produce spodumene, also owns the Mt Cattlin lithium mine near Ravensthorpe and holds interest in the James Bay spodumene project in Quebec.
