Albemarle said that it will not pursue its previously announced plans to acquire Liontown Resources, an emerging Tier-1 battery minerals producer based in Australia, for A$6.6bn ($4.2bn).
The American speciality chemicals manufacturing company cited the increasing complexities related to the proposed deal as a reason for its decision.
As a result, Albemarle has formally withdrawn its non-binding offer to the Australian firm’s board of directors. Its decision comes with the exclusive due diligence process about to end.
Last month, Liontown Resources’ board recommended Albemarle’s revised bid of A$3 ($1.9) per share.
Earlier this month, Hancock Prospecting, a mining and agricultural business run by Australian billionaire Gina Rinehart, raised its stake in Liontown Resources to become the miner’s largest shareholder.
It was reported by Reuters that Gina Rinehart’s move could possibly block Albemarle’s proposed takeover of Liontown Resources.
Albemarle CEO Kent Masters said: “Our engagement with the Liontown team has been meaningful and productive. We appreciate the level of cooperation we have received, and we thank the entire team for their efforts.
“That said, moving forward with the acquisition, at this time, is not in Albemarle’s best interests.”
Albemarle stated that the decision aligns with its disciplined approach to capital allocation. The company will maintain its commitment to executing its long-term growth strategy, with planned expansions geared toward achieving volumetric growth throughout its global portfolio.
Albemarle’s core capital allocation priorities include investing in high-return organic and inorganic growth, preserving financial flexibility and its investment-grade credit rating, and ensuring funding for dividends.
Liontown Resources managing Director and CEO Tony Ottaviano said: “We acknowledge Albemarle’s decision. They were constructive and respectful throughout the diligence process.
“Notwithstanding, our position to maintain momentum on our base plan has allowed us to keep line of sight of first production from the Kathleen Valley Project in mid-2024.”
