SYDNEY— Orocobre Ltd. agreed to buy rival Australian miner Galaxy Resources Ltd. in an all-stock deal that would create a $3 billion miner and one of the world’s biggest producers of lithium, a commodity used in batteries for electric vehicles and other high-tech products.
The deal comes at a time when lithium prices are climbing because of concerns about shortages of the commodity and a bigger-than-anticipated electric-vehicle boom. Orocobre runs the Olaroz lithium operation in northern Argentina, while Galaxy runs the Mt. Cattlin mine in Australia and has projects under development in Argentina and Canada.
Based on the companies’ closing share prices on Friday, a combined company would have a market value of 3.96 billion Australian dollars, equivalent to $3.06 billion. If the deal consummates, the new miner would be the fifth-largest global lithium miner, the companies said. Orocobre will acquire all of the shares in Galaxy, whose shareholders will receive 0.569 Orocobre shares for each of their own stock. Orocobre shareholders will own 54.2% of the combined group and Galaxy shareholders will own the remaining 45.8%.
Galaxy Chairman Martin Rowley will become nonexecutive chairman of the combined group, with Orocobre Chief Executive Martín Pérez de Solay becoming CEO.
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