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Wesfarmers, Kidman to implement A$776M merger

Wesfarmers Ltd. formally agreed to acquire 100% of Kidman Resources Ltd. for A$1.90 cash per share in a transaction valued at A$776 million, the companies said May 23.

The companies entered into a scheme implementation deed for the previously announced acquisition following the completion of an exclusive due diligence period.

The offer represented a 47.3% premium to Kidman's closing price of A$1.29 per share May 1, valuing Kidman at about A$776 million. Pending the absence of a superior proposal, Kidman's board urged its shareholders vote in favor of the merger.

As part of its due diligence into Kidman, Wesfarmers pegged its potential share of the capital expenditure for developing the Mount Holland lithium joint venture in Western Australia with Sociedad Quimica y Minera de Chile SA, or SQM, at about A$700 million, which will result in improvements in plant operating efficiency. First lithium hydroxide production at Mount Holland is slated for the second half of 2022.

SQM also agreed not to enter into discussions over Mount Holland with parties proposing an alternative offer for Kidman.

The full implementation of the scheme is scheduled to take effect in September.