Australian nickel and lithium miner IGO will acquire nickel producer Western Areas in an all-cash deal valued at A$1.10-billion ($785-million), the companies said on Thursday.
The deal follows IGO's $1.4-billion acquisition of a stake in Tianqi Lithium's Australian assets in June, as the company looks to capitalise on rising demand for raw materials used to make electric-vehicle batteries.
The offer of A$3.36 for each Western Areas share held is at a 3.7% premium to the stock's last close. The shares have gained about 31% since preliminary discussions about the deal were announced on August 19.
Western Areas shares rose as much as 5.3% on Thursday after a trading halt, while IGO's were marginally higher.
The acquisition will be funded through IGO's existing cash and a A$900-million senior-secured debt facility, the companies said.
The deal has been unanimously recommended by Western Areas' board and its largest shareholder, Perpetual, has agreed to vote in favour.