Australian lithium miner Liontown Resources backs $4.3bn takeover offer from Albemarle Corp

Australian lithium miner Liontown Resources Ltd. said it is willing to back a new A$6.6 billion ($4.3 billion) takeover offer from Albemarle Corp., the world’s top producer of the battery metal.

The US-based producer boosted its per-share cash offer to A$3, Liontown said Monday, up from A$2.50 per share in March. The Western Australia-based target said it was willing to recommend the latest bid — a 15% premium to Friday’s close — and granted the firm due diligence.

Such a deal would cement the stunning rise of the Australian lithium sector, where newly founded and previously little-known companies have soared more than tenfold. It reflects surging demand for the metal from carmakers amid a transition away from fossil fuels.

The offer comes after a slump in lithium prices from last year’s record and a corresponding drop in share prices of lithium producers. Albemarle, which already owns stakes in lithium mines in Australia and has a processing plant, had offered to acquire all of Liontown’s equity at A$2.50 a share, its third bid in five months, the Perth-based company said in March.

Liontown had previously rebuffed Albemarle’s approach on the basis of forecasts for fivefold growth in global lithium demand by 2030 and a predicted supply deficit.

The company owns one of the most promising early-stage lithium projects in Australia, the world’s top exporter of the battery metal, and has supply agreements with major automakers including Tesla Inc. and Ford Motor Co.