Canadian lithium company Millennial Lithium Corp said on Tuesday local time that Ningde Times had agreed to buy the company for C $377 million (1.92 billion yuan).

It is worth noting that in July, Ganfeng Lithium, with a market capitalization of more than 200 billion, announced that the company would buy Millennial for C $3.60 a share with a transaction value of no more than C $353 million.

To this end, in this transaction, Ningde Times will also compensate Ganfeng Lithium 10 million US dollars in liquidated damages.

Three Chinese companies have competed for "white oil"

With the continuous popularity of new energy vehicles and lithium battery market, lithium resource, known as "white oil", has become another focus of global competition after oil and rare earths.

After winning the Nobel Prize in chemistry in 2019, Gudinav, the father of lithium batteries, warned: "Lithium resources are as important as oil and other strategic resources. Once there is a bottleneck in lithium exploitation, it may become the fuse of war like oil." "

Therefore, in the acquisition process of Canadian Millennium Lithium Industry, it has attracted a number of companies to compete. Among them, there are three Chinese enterprises.

Ganfeng Lithium announced on July 16 that the company agreed to buy 100% stake in Canadian lithium company Millennium Lithium with its wholly-owned subsidiary Ganfeng International or its wholly-owned subsidiary with its own funds. The transaction price is 3.6 Canadian dollars per share. The transaction amount does not exceed 353 million Canadian dollars (about 1.807 billion yuan).

Then, according to Bloomberg, Ningde Times also made an offer for Millennium Lithium at a price of 377 million Canadian dollars (1.914 billion yuan), which was higher than Ganfeng Lithium's previous offer.

In addition, the report also said that China Molybdenum had also considered participating in the bidding for Millennium Lithium Industry.

Millennium Lithium said in a statement on Sept. 8 that it had informed Ganfeng Lithium that the Ningde era offer had an advantage and allowed Ganfeng Lithium to revise its existing offer by Sept. 27. But Ganfeng Lithium finally chose to give up.

Ningde Times offered C $3.85 a share for Millennium Lithium, surpassing Ganfeng Lithium's offer of C $3.60 a share in July and about 29% higher than Millennium Lithium's 20-day average closing price of C $2.98 on the Toronto Stock Exchange's gem board, beating Ganfeng Lithium to win the bidding war.

King Ning just spent 1.5 billion yuan on one of the world's largest lithium mines in Africa.

Before the acquisition of Millennium Lithium, the deep-pocketed Ningde era began to "buy" mining companies around the world.

On Sept. 28, Ningde Times will invest $240 million (1.552 billion yuan) in Manono, a lithium project in the Democratic Republic of the Congo (DRC) in Africa.

It is reported that the Manono project is one of the largest lithium resource projects in the world, with estimated lithium reserves of 400 million tons and lithium oxide grade of 1.65%, which is also at a high level. According to the feasibility report released by AVZ in April 2020, the design capacity of the Manono project includes an annual production capacity of 700000 tons of lithium oxide with a design life of 20 years.

In September 2019, Ningde Times subscribed 183 million common shares of Australian lithium mining company Pilbara Minerals through wholly-owned subsidiaries, accounting for about 8.5 per cent of the total share capital. The post-subscription Ningde era is its third largest shareholder, and Ganfeng Lithium's subsidiary ranks eighth.

It is worth noting that in mid-September this year, Pilbara Minerals's 8000 tons of lithium concentrate was sold at auction for a whopping $2240 / ton, causing global unrest.

Yes, that's right. The sky-high Pilbara Minerals is the Australian lithium mine held by Ningde era and Ganfeng Lithium.

In addition, Ningde Times also acquired more than 10 million shares in Neo Liquitium Corp, another Canadian lithium company, and became the company's third largest shareholder, winning a board seat.

In 2018, Ningde Times invested in North American nickel North American Nickel Inc and North American lithium North American Lithium lnc.

Market worry: frequent mergers and acquisitions increase debt

Ganfeng Lithium, who failed in this bid, also did not stop buying this year.

Since the beginning of this year, Ganfeng Lithium has made four large-scale acquisitions, with a capital of as much as 4.2 billion yuan. Ganfeng Lithium raised another HK $4.854 billion on June 22 this year and plans to continue to buy lithium resources such as ore, brine and lithium clay.

Although some analysts shouted, in the future, the lithium price will certainly exceed 200000 / ton.

As of Sept. 27, the average price of domestic battery-grade lithium carbonate has risen to 169500 yuan / ton, up more than 90 percent from 82000 yuan / ton in July, according to the spot average price of SMM.

However, there are still market participants who worry that high-level acquisitions will increase the company's debt and lead to potential risks. In 2018, Tianqi Lithium Co., Ltd. added $3.5 billion in M & A loans as a result of buying a 23.77% stake in SQM. Since then, the company's asset-liability ratio and financial expenses have risen sharply, making the company experience a dark moment for two years from 2019.