SQM and Hancock bid $1.1 billion for lithium miner Azure

The Chilean chemical maker SQM is partnering with the Australian mining firm Hancock Prospecting to acquire Azure Minerals’ Australian lithium mining project in a deal worth more than $1 billion.

SQM, which already had a nearly 20% stake in the company, first offered to buy the rest of Azure in a roughly $600 million deal in July, but Azure rejected the offer. In October, SQM upped its offer, proposing a deal that valued Azure at more than $1 billion and garnered support from Azure’s leadership and major shareholders. Shortly afterwards, Hancock bought 18% of Azure’s shares, enough to raise concerns that it would spoil the acquisition. The Australian firm Mineral Resources also built up a 14% stake in Azure following SQM’s offer.

On Dec. 18, SQM and Hancock, which together control about 38% of Azure shares, announced their joint bid for Azure. The $1.1 billion offer is a 5% increase over SQM’s October bid and values Azure about 65% higher than before the bidding started. Azure executives and some major shareholders have endorsed the deal, which will have to be approved by Australian regulators and Azure’s remaining shareholders.

In a statement, the partners argue that combining SQM’s expertise in lithium extraction with Hancock’s understanding of Australian mining will increase the project’s odds of success. “This powerful partnership brings together the complementary skills of our respective companies,” Hancock CEO Garry Korte says in the statement.

SQM’s cooperation with Hancock follows the collapse in October of Albemarle’s bid to buy the Australian lithium miner Liontown Resources. Albemarle had proposed an acquisition worth $4.3 billion, but Hancock built up a nearly 20% share of Liontown soon after, raising the possibility that it could vote against the proposal. Albemarle decided not to move forward with the acquisition, citing the growing complexity of the situation.