Blog Exposure - Canada's Nutrien Divests Partial Stake in Chile’s SQM to China’s Tianqi Lithium
LONDON, UK / ACCESSWIRE / May 21, 2018 / If you want access to our free research report on Nutrien Ltd (NYSE: NTR), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=NTR as the Company's latest news hit the wire. On May 17, 2018, the Company announced that it has signed an agreement with China's Tianqi Lithium Corporation to divest its stake in Sociedad Química y Minera de Chile S.A. (NYSE: SQM). SQM is a global Company with five main business segments - Specialty Plant Nutrition, Iodine and derivatives, Lithium and derivatives, Industrial Chemicals and Potassium. The deal is valued approximately $4.07 billion. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Nutrien and Sociedad Química y Minera de Chile most recent news are on our radar and our team decided to put out fantastic reports on these companies that are now available for free below:
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Details of the Divestment
As per the terms of the agreement, Tianqi Lithium has agreed to acquire 62,556,568 Series A SQM's shares from Nutrien. Tianqi Lithium has agreed to pay $65 in cash for each series A SQM share. The divestment represents Nutrien's entire holdings of series A SQM shares and are valued approximately $4.07 billion. The transaction does not include the series B SQM shares owned by Nutrien, which the Company plans to divest at a later date. At present, Nutrien owns 20,166,319 series B SQM shares.
The deal is expected to close in Q4 2018 subject to receipt of regulatory approvals, approval from Tianqi Lithium's shareholders, and other closing conditions.
The acquisition is highly attractive to Tianqi Lithium given the growing global demand for electric vehicles. Lithium is the key component that fuels electric vehicles and is in high demand from automotive companies across the world.
Commenting on the divestment of SQM A series shares to Tianqi Lithium, Chuck Magro, President and CEO of Nutrien, said:
"The announced sale of the majority of our SQM holdings marks another key integration milestone for Nutrien. With growing free cash flow, combined with the significant proceeds from this sale, Nutrien further enhances our balance sheet and liquidity, and places us in a strong position to execute on our capital allocation priorities."
Vivian Wu, President of Tianqi Lithium, added:
"This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy. Tianqi Lithium's shareholders will greatly benefit from this transaction given SQM's long-term stable financial returns and steady dividends."
About Sociedad Química y Minera de Chile S.A.
Founded in 1968, Chile-based SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilizers, and industrial chemicals. It has a global presence through an extensive distribution and sales network in over 100 countries across Europe, America, Asia, and Oceania. The Company processes caliche ore and salt brines at its plants in Northern Chile. These two natural resources are the basic raw material for SQM's broad product portfolio. The Company reported revenue of $2.2 billion and earnings before interest, tax, depreciation, and amortization (EBITDA) of $894 million for FY17. The Company's Lithium and Derivatives business segment contributed $645 million in revenues, or approximately 60% to the Company's gross profit.
Backdrop
Nutrien is the company formed in January 2018 with the merger of two of Canada's biggest fertilizer Companies - Agrium Inc. and Potash Corp. of Saskatchewan Inc. ("PotashCorp"). The merger which was announced in September 2016 was expected to create a global agricultural giant with an enterprise value of $36 billion. The deal was approved by China's antitrust regulators in November 2017. However, the approval from Chinese regulators came in with certain conditions. One of the conditions was that PotashCorp should divest its minority stake in Arab Potash Company and SQM within 18 months of closing the merger.
The Competition Commission of India also approved the merger in October 2017 with a similar condition that PotashCorp divest its stake in Arab Potash Co. and SQM within 18 months of closing the merger.
Nutrien has been looking to divest its stake in SQM accordingly. It was rumored that Rio Tinto and Tianqi Lithium were both interested in acquiring Nutrien's stake in SQM.
About Nutrien Ltd
Saskatoon, Canada-based Nutrien was formed in January 2018 with the merger of Agrium and PotashCorp. It is one of the world's largest agriculture Companies that provides crop nutrients, inputs and services. It has four main business units - Retail, Potash, Nitrogen, and Phosphate & Sulphate. The Company produces and distributes over 26 million tonnes of potash, nitrogen, and phosphate products for agricultural, industrial, and feed customers worldwide. The Company has a global presence across 14 countries and is supported by a team of nearly 20,000 employees.
About Tianqi Lithium Corporation
Chengdu, China-based Tianqi Lithium is a leading global supplier of lithium products with major businesses in lithium resource development, exploration, and downstream lithium refining. The Company manufactures a wide range of quality lithium products including lithium hydroxide, lithium carbonate, lithium chloride, lithium metal and mineral concentrates. The Company's production facilities are located in China, Australia, and Chile and supplies to customers across Europe, Asia, the Americas, and Oceania.
Stock Performance Snapshot
May 18, 2018 - At Friday's closing bell, Nutrien's stock marginally declined 0.17%, ending the trading session at $51.44.
Volume traded for the day: 1.63 million shares.
Stock performance in the last month – up 8.02%; and previous three-month period – up 15.80%
After last Friday's close, Nutrien's market cap was at $43.22 billion.
Price to Earnings (P/E) ratio was at 133.26.
The stock has a dividend yield of 3.11%.
The stock is part of the Basic Materials sector, categorized under the Agricultural Chemicals industry.
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