UK Bacanora agrees to Ganfeng Lithium acquisition offer

British listed company Bacanora Lithium has agreed to a cash offer worth 284.8 million euros from China's Ganfeng Lithium (Ganfeng Lithium), a deal that will give China's largest lithium producer control of a mine in Mexico, according to foreign media reports.

Bacanora owns the Sonora lithium project in Mexico, which will be put into production in 2023. The project, located 170km south of the US border, is well positioned to supply the US auto market.

Mr Gan said it had the support of Bacanora's second-largest shareholder, Machig, who holds a 14 per cent stake in Bacanora. Mr Gan already owns 29 per cent of Bacanora and needs 50 per cent of its shareholders to support the deal.

As early as early May, Ganfeng's offer for 67.5p a share of Bacanora was opposed when it was first announced, with some shareholders saying that Gan Feng undervalued Bacanora, although it represented a 50 per cent premium to Bacanora's closing price on May 5.

On August 25th, Bacanora Chairman Mark Hohnen said, "We are very pleased that Bacanora has been able to cooperate effectively with Gan Feng and agree on the terms of the formal acquisition offer." Bacanora also said that as part of the deal, its shareholders would now also receive shares in Zinnwald Lithium, which is listed on the London alternative Investment Market, and Bacanora holds a 36 per cent stake in the company. With these shares, the premium will rise to 63 per cent, the company said.

Zinnwald, with a market capitalization of 66 million euros, is developing a lithium mine in Germany, 35km from Dresden. Zinnwald said in a statement that it looked forward to continuing to work with potential new shareholders.

This acquisition will be the latest acquisition by Ganfeng Lithium Industry. Last month, Gan Feng bought Canada's millennium Lithium, which has a project in Argentina, for C $343 million. In June, Gan Feng also bought a 50 per cent stake in Goulamina lithium mine in Mali for $130 million. Ganfeng is now the world's largest listed lithium producer, and its shares have risen 86 per cent this year.

The price of lithium carbonate, the type of lithium used in most electric car batteries, has doubled this year, according to an index compiled by (Benchmark Mineral Intelligence), the UK's benchmark mining intelligence. Analysts also predict that there will be a shortage of lithium materials in the coming years as sales of electric vehicles continue to grow.