Orocobre (TSX: ORL) and Galaxy Resources Limited have announced entry into a binding Merger Implementation Deed (MID) where the two companies will merge in a Galaxy Scheme of Arrangement (Scheme) where Orocobre will acquire 100% of the shares in Galaxy. Shareholders of Galaxy will receive 0.569 Orocobre shares for each Galaxy share held at the record date of the Galaxy Scheme of Arrangement. At the execution of the Scheme, Orocobre shareholders will own 54.2% of the fully diluted share capital of the combined entity and Galaxy shareholders will own the remaining 45.8%.
The board of both companies have unanimously recommended the Scheme and plan to vote all the shares they hold in favour of the Scheme. Martin Rowley shall become Non-Executive Chairman as Robert Hubbard would become Deputy Chairman, as Martin Perez de Solay will remain CEO and Managing Director of the group.
Galaxy Chairman Martin Rowley commented: “This transaction has the potential to be a significant valuecreating opportunity for Galaxy and Orocobre shareholders. The Scheme provides shareholders of Galaxy with the opportunity to share in the significant benefits of being part of a larger diversified group and the synergies expected to be available to help enhance and progress our portfolio of world class assets. The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium.” Orocobre Chairman Robert Hubbard commented: “The logic of this merger is compelling. Both Orocobre and Galaxy shareholders, will benefit from the diversification, growth and scale of a top 5 global lithium chemicals company. I take this opportunity to re-iterate the group’s ongoing commitment to the principles of delivering the highest level of transparency of our environmental, social and governance performance, the foundations upon which our assets have and will continue to be developed.”