Herbert Smith Freehills advises IGO Limited on its A$1.9 billion acquisition of 49% of Tianqi Lithium Energy Australia

Herbert Smith Freehills is proud to have advised IGO Limited (IGO) on its proposed A$1.9 billion acquisition of 49% of Tianqi Lithium Energy Australia, a subsidiary of China’s Tianqi Lithium Corporation that holds a 51% interest in the Greenbushes Lithium Mine — the world’s largest hard rock lithium mine — and a 100% interest in a lithium hydroxide plant, both located in Western Australia.

Headquartered in Perth, IGO is a leading ASX-listed mining company and long-standing client of Herbert Smith Freehills. The transformational transaction is aligned with IGO’s evolving strategy of becoming a global supplier of metals that are critical to enabling a clean energy future, and will establish IGO as an Australian leader for the production of clean energy metals with assets across lithium, nickel, copper and cobalt.

The transaction reflects a continuing shift in global markets towards clean energy technologies, including those related to electric vehicles and renewable energy, which underpin the strong outlook for the lithium sector. The Greenbushes Lithium Mine accounted for 21% of global lithium supply in 2019.

The transaction is another example of Herbert Smith Freehills’ cross-practice team achieving outcomes for clients, with the firm advising IGO on:

·       the acquisition itself, being the acquisition of 49% of Tianqi Lithium Energy Australia, the 51% owner of the Greenbushes Lithium Mine and 100% owner-operator of the Kwinana lithium hydroxide plant;

·       IGO’s fully underwritten A$776m capital raising used to partially fund the transaction, structured as a placement and accelerated non-renounceable entitlement offer; and

·       IGO’s A$1.1 billion syndicated debt facility, also used to partially fund the transaction.

The Herbert Smith Freehills deal team was led by partner Paul Branston, with partner David Gray leading the capital raising and partner Andrew McLean leading the financing.

The Corporate team was supported by senior associates Charlotte Cameron and Panashi Devchand, solicitors Jasper Johnson and Linda Nguyen, and graduate Georgia Kalyniuk. The Finance team was supported by solicitors Dave Thomas and Kai Low.

Herbert Smith Freehills partner Paul Branston said, “This is a truly transformational transaction for IGO, which furthers its ongoing strategy of becoming a global leader in the supply of metals that support the growth of clean energy. We are delighted to continue working with IGO on this and other important transactions.”

Herbert Smith Freehills partner Andrew McLean commented on the debt financing by adding, “This transaction shows that financiers are very keen to support companies with a strong existing asset base such as IGO’s, as they look to grow through targeted M&A activity.”

The transaction is another example of Herbert Smith Freehills’ market-leading work in the mining sector.