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UPDATE 2-China's Ganfeng to buy Millennial Lithium for up to $280 mln

·2 min read

* Offer at C$3.60/share versus current Millennial price of C$3.32

* Target has two lithium projects in Argentina near Ganfeng assets

* Millennial recommends shareholders vote in favor (Adds Millennial comment, detail)

By Tom Daly

July 16 (Reuters) - China's Ganfeng Lithium Co Ltd said on Friday it would buy Argentina-focused Millennial Lithium Corp for about C$353 million ($280 million), extending a deal spree by one of the world's biggest producers of the white metal.

Prices for lithium, a key ingredient in electric vehicle batteries, are up more than 65% year-to-date in China amid resurgent demand following a three-year downturn.

The bid by Ganfeng unit GFL International at C$3.60 per share is a premium of 8.4% to Vancouver-based Millennial's closing price of C$3.32 on Thursday, the company said in a filing to the Shenzhen Stock Exchange.

Millennial recommended that shareholders support the offer, which it said had unanimous board approval and backing from its largest investor.

The deal, expected to close in the fourth quarter of 2021, provides "a very attractive opportunity for Millennial's shareholders to realize full liquidity at a substantial premium to the current share price," CEO Farhad Abasov said.

Ganfeng has so far this year agreed to buy the shares it does not already own in Mexico-focused Bacanora Lithium for $264.5 million, as well as stakes in a lithium mine in Mali and a salt lake in China for $130 million and 1.47 billion yuan ($227 million), respectively.

Millennial has two non-producing lithium brine projects - Pastos Grandes and Cauchari East - in northern Argentina close to Ganfeng's existing operations in the country, which include a joint venture with Lithium Americas Corp

Ganfeng said this week it expects first-half net profit to rise up to 922.5% year-on-year to as much as 1.6 billion yuan, having earlier forecast a rise of 411.2-666.9%, as the lithium price rally helps fund its expansion plans.

($1 = 1.2589 Canadian dollars) ($1 = 6.4705 Chinese yuan renminbi) (Reporting by Tom Daly Additional reporting by Jeff Lewis in Toronto Editing by Jason Neely, David Evans and Frances Kerry)