(Reuters) -Rio Tinto said on Wednesday it will acquire Arcadium Lithium in an all-cash transaction, valuing the latter at $6.7 billion.

Rio Tinto will acquire the United States-based lithium producer for $5.85 per share, it said. The deal represents a premium of 90% to Arcadium's closing price of $3.08 per share on October 4.

Reuters exclusively reported last week that the companies had been holding talks and that Arcadium could be valued at $4 billion to $6 billion or higher.

(Reporting by Archishma Iyer in Bengaluru; Editing by Abinaya Vijayaraghavan)