Nov 7 (Reuters) - Arcadium, the lithium

producer that has agreed to sell itself to Rio Tinto,

posted an 82% drop in quarterly income on Thursday that missed

Wall Street's expectations due to sliding prices of the electric

vehicle battery metal.

Much of the lithium industry is contending with a supply

glut brought on in part by a softening of aggressive EV adoption

rates and oversupply from China. Yet that market imbalance is

projected to end later this decade, making Arcadium's portfolio

of top lithium projects across the globe a prime target for Rio,

which is paying $6.7 billion for the company.

Rio CEO Jakob Stausholm first approached Arcadium about a

potential deal in June and the mining giant's board proposed

$5.25 per share, an offer that Arcadium's board rejected,

according to a recent regulatory filing.

Negotiations continued and Arcadium eventually agreed to

provide Rio with sensitive business information, according to

the filings. Reuters was first to report the two sides were in

negotiations in early October, and five days later both sides

agreed to a sweetened offer of $5.85 per share in cash.

"We are excited that this transaction will give us the

opportunity to accelerate and expand our strategy," Arcadium CEO

Paul Graves said in a statement on Thursday.

Arcadium posted third-quarter net income of $16.1 million,

or 1 cent per share, compared to $87.4 million, or 17 cents per

share, in the year-ago quarter. Analysts had expected earnings

of 4 cents per share, according to IBES data from LSEG.

Shares of the Philadelphia-based company were unchanged in

after-hours trading. They fell about 1% on Thursday to close at

$5.38.

Given the Rio buyout, slated to close next year, Arcadium

does not plan to hold a conference call to discuss the results.