Lithium Deals Drive Argentina’s M&A Market

The world’s second-largest reserves of the metal that is key to battery production continue attracting investors, while energy deals also figured strongly during May and June

Argentina's lithium reserves continue to attract investment
July 06, 2022 | 01:05 PM

Buenos Aires — Despite an increasingly complex economic outlook due to the lack of dollars in the coffers of Argentina’s central bank, the country’s mergers and acquisitions (M&A) market saw significant movements between May and June, and four of the 10 transactions announced were related to lithium, while two were in the energy sector.

Argentina has the second-largest lithium reserves in the world, with two projects in operation, out of more than 20 under development, and is already the fourth-largest lithium producer in the world. With the projects underway and the new announcements this year, the country expects to exceed the annual production of its main regional competitor, Chile, in the short term.

Lithium-focused M&As

Zannge Mining Co (Announced)

The lithium mining company will develop a lithium project in Catamarca, after acquiring a majority stake in the Laguna Verde lithium project for $10 million , which until now was operated by Canadian company Ultra Lithium.

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In a transaction that has yet to be approved, Zangge Mining will own 65% of the project, and announced that it will invest a further $40 million over the next few years.

Navion Capital Inc (Announced)

Navion Capital Inc, a Canadian publicly traded joint venture company, has signed a letter of intent with Noa Lithium Brines SA to acquire all of Noa’s issued and outstanding securities from the company.

The transaction, the value of which was not disclosed, is subject to TSX-V approval, and will give Navion Capital Inc. the rights to operate Noa’s four projects in Argentina’s Salta province.

The so-called 'Lithium Triangle', made up of Argentina, Bolivia and Chile, is the world's largest reserve of the mineral (Wolfgang Kaehler/Getty Images via Bloomberg)dfd

Xantippe Resources Ltd (Announced)

Xantippe Resources Limited, an Australian company listed on the Australian stock exchange, reported that it has secured an option to acquire four additional tenements in the vicinity of Lake ResourcesKachi Project. These four properties have a total area of 23,475 acres, bringing XTC’s total holdings to 54,116 acres. “They are all prospective lithium brine deposits in Catamarca, Argentina, and will be known as the Carachi Pampa Lithium Project, the company reported. The value of the transaction was not disclosed.

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The company also announced a $15.8 million definitive agreement to acquire Luz María, a highly prospective lithium property in Catamarca, Argentina, also owned by Lake Resources.

Australia is the world’s leading lithium producer, but extracts the mineral from rock, unlike the exploitation in Argentina, which comes from brine.

Energy deals

SCC Power (Closed)

London-based SCC Power announced in May that, together with related entities, it has completed the acquisition of Stoneway Capital Corporation’s company, “which consists of four power generation facilities located in Argentina with a total installed capacity of 737 MW”. The transaction is valued at $841 million.

The deal was made pursuant to the Canada Business Corporations Act of Stoneway and its related debtors retaining their businesses, effective May 17, 2022.

SCC Power is a public limited company incorporated under the laws of England and Wales, wholly controlled by Stoneway Custody Statutory Trust. It is the majority shareholder of MSU Energy SA, an Argentine power generator that owns and operates three state-of-the-art combined cycle power plants with a total installed capacity of 750MW.

Helmerich & Payne (Closed)

Helmerich & Payne recently announced its $33 million investment in Galileo Technologies, a company that uses a unique technology to capture natural gas from any source and convert it to liquefied natural gas on-site.

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The $33 million investment in the company was in the form of a convertible promissory note. The convertible note will bear interest at 5% per annum and matures in April 2027. If executed, the note will convert into shares of Galileo common stock with an enterprise value of $1.35 billion.

Helmerich & Payne is one of North America’s largest providers of onshore drilling solutions, and together with Galileo “plans to identify and pursue business development opportunities that, if successful, have the potential to reduce fuel costs and carbon emissions from well energy consumption”.

El fundador y CEO de Ualá, Pierpaolo Barbieri.dfd

More M&A deals in Argentina in May and June

Ualá (Closed)

In June, Argentina’s Central Bank approved the purchase of the country’s first digital bank, Wilobank, by Ualá, which will own 100% of its shares. According to an official statement, “in the next few days the share transfer process will be completed, thus initiating a period of integration between the two companies that will enable Ualá to expand its range of services and thus offer more and better financial solutions”.

Clicoh Express SAS (Series A round)

Against a backdrop of tightening conditions for technology companies, Argentina-based clicOH, a shipping technology company, raised $25 million in a Series A round of venture funding led by Tiger Global, and which also included JAM Fund and existing investors Flexport, FundersClub and Vast VC.

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The latest investment gives the company a total of $33 million in funding since it was founded in 2018 by Juan Martín Altamirano, Emiliano Segura and Agustín Novillo Saravia.

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ClicOH operates in Argentina, Mexico, Chile and Uruguay and offers a service that allows sellers to track shipments in real time through a dashboard with key indicators and traceability.

Visma (Announced)

The Norwegian company entered the enterprise resource planning (ERP) market in Latin America for SMEs through the acquisition of Contagram, which was founded in 2015, and which aims to “simplify the lives of entrepreneurs in Argentina and has more than 2,500 customers”.

The value of the transaction was not disclosed.

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Citri & Co (Announced)

Tucumán, Argentina-based company San Miguel, a global leader in the production and export of fresh and processed citrus fruits, announced in June the signing of an agreement for the sale of its fresh fruit operations in South Africa and Peru.

The agreement includes the sale of its fresh fruit operations in South Africa and Peru to Spanish company Citri&Co, representing 100% of the shares of San Miguel Fruits Perú and San Miguel Fruits South Africa, as well as the exclusive marketing of the fresh fruit that the company will continue to produce in Argentina and Uruguay.