Tesla supplier Piedmont Lithium to merge with Australia’s Sayona

Investing.com– Piedmont Lithium Ltd (ASX:PLL), which supplies the battery making metal to Tesla Inc (NASDAQ:TSLA), will be taken over by Australia’s Sayona Mining Ltd (ASX:SYA) in an all stock deal that will create a major American lithium producer. 

Piedmont’s U.S. shareholders will receive 527 of Sayona’s American depository shares for each share in Piedmont, the two said in a statement on Tuesday.  Sayona’s ADSs currently trade in over-the-counter markets.

Piedmont’s Australian shareholders will receive 5.27 Sayona shares for each of their shares. Based on Sayona’s Australian close on Monday, the deal represents a value of A$0.20026 per Piedmont share, an 8% premium to the last traded price of Piedmont’s Australian shares. 

Under the deal, the two will combine with Sayona becoming the parent entity, with a primary listing in Australia along with a secondary listing on the Nasdaq. Sayona and Piedmont shareholders are expected to have an approximately equal share in the merged firm. 

Piedmont supplies spodumene concentrate to Tesla under a five-year agreement signed in 2020. But the company has been grappling with sluggish demand and high lithium supply in recent years, especially as electric vehicle demand was less robust than previously estimated.