Arcadium Lithium Plc ( ARLTF ) shares are trading higher on Wednesday after the company announced that it secured Committee on Foreign Investment in the United States (CFIUS) clearance regarding Rio Tinto‘s proposed acquisition.

The Details: Arcadium entered into a definitive agreement to be acquired by Rio Tinto in an all-cash transaction valued at $5.85 per share back in October. This represents a premium of 90% to Arcadium’s closing price of $3.08 per share on Oct. 4.

By acquiring Arcadium, Rio Tinto gains its Tier 1 assets with strong, consistent margins and a resource base projected to support 130% capacity growth by 2028 within Rio Tinto’s existing regions.

Furthermore, the companies have complementary footprints and extensive history in Argentina and Quebec, where Rio Tinto plans to establish world-class lithium hubs. By combining technological leadership in lithium extraction, the acquisition will position Rio Tinto as a market leader in lithium processing both in these regions and beyond.

Moreover, Rio Tinto is confident in the long-term outlook for lithium, anticipating a compound annual growth rate of over 10% in lithium demand through 2040, which is expected to result in a supply deficit.

“Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminum and copper operations to supply materials needed for the energy transition,” said Rio Tinto CEO Jakob Stausholm.

“Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realize the full potential of its Tier 1 portfolio. This is a counter-cyclical expansion aligned with our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle.”

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ALTM Price Action: At the time of publication, Arcadium shares are moving 8.44% higher at $5.71, according to data from Benzinga Pro.

Image: Courtesy of Arcadium Lithium Plc ( ARLTF )