China's Tianqi Lithium Corp. is close to acquiring a 24% stake in Chilean lithium miner Sociedad Quimica y Minera de Chile SA, or SQM, from Nutrien Ltd. for US$4.3 billion, Reuters reported May 16, citing sources familiar with the transaction.
The stake sale in SQM is part of the conditions set by regulators to approve the merger of Agrium Inc. with Potash Corp. of Saskatchewan, which formed Nutrien. The TSX-listed fertilizer producer holds a 32% stake in SQM, which it must divest by March 2019.
According to the report, Tianqi is in talks with institutional investors and banks for financing, with the acquisition to be funded by bank and mezzanine loans and working capital.
The deal, however, may face snags as Corfo filed a complaint with antitrust regulator FNE to block the potential sale in March.
The Chilean development agency cited that the SQM stake sale may give China an unfavorable advantage in securing resources for the development of electric vehicles and would "gravely distort market competition."
Tianqi fired back on the allegations, saying it was a privately held company, in which the Chinese government has no interference.
