- Australian conglomerate Wesfarmers has entered into a formal agreement to acquire 100% of ASX-listed lithium miner and Tesla supplier, Kidman Resources.
- The transaction has the support of Kidman’s board and will now go to a shareholder vote before needing to be approved by the courts.
- Kidman is a supplier of lithium batteries to Tesla via its Mt Holland mining venture in Western Australia.
Wesfarmers has taken a step closer to its intended takeover of Kidman Resources, an ASX-listed lithium miner and supplier to electric vehicle pioneer Tesla.
In a statement to the ASX, Wesfarmers has announced it has entered into a formal agreement with Kidman, confirming its proposal to acquire 100% of the shares in the mining company. Or, in other words, Kidman has agreed to the terms of its own takeover, with Wesfarmers valuing the transaction at approximately $776 million.
The statement said the proposal has the approval of Kidman’s board and major shareholder. Now, it is up to the retail investors in Kidman and the courts to have their say, with a shareholder meeting planned for August.
The takeover would see Wesfarmers venturing into the electric vehicle space, as one of Kidman’s key projects — the Mt Holland lithium mine in Western Australia which it operates as a joint venture with Chilean company Sociedad Quimica y Mera de Chile SA (SQM) — is a major supplier of lithium batteries to Tesla.
Wesfarmers managing director Rob Scott said in the statement the deal works in the favour of both parties.
“This is an important milestone in advancing a transaction that provides Wesfarmers with an attractive investment and delivers Kidman shareholders with a compelling premium and certain cash return,” Scott said.
The ASX statement said Wesfarmers has also entered into an agreement with SQM to ensure the Mt Holland joint venture will go ahead if the takeover is approved by shareholders and the courts.
Wesfarmers de-merged from supermarket giant Coles in November 2018, which Business Insider Australia reported at the time would allow Wesfarmers to “hunt out bargains and opportunities for high growth”.
Wesfarmers has been seeking entry into the natural resources sector for some time, pursuing a takeover of Malaysian rare earths miner Lynas Corporation — a deal The Sydney Morning Herald reported this week “appears to be dead”.
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