Chile Constitutional Court on Thursday rejected a lawsuit to block Chinese miner Tianqi’s purchase of a stake in Chilean lithium miner SQM, clearing the way for the transaction to close.
In a majority ruling, the court said the lawsuit was “inadmissible” and lifted its suspension on the $4.1 billion sale to Tianqi Lithium Corp (002466.SZ) of a 24 percent holding in world No. 2 lithium miner SQM (SQMa.SN).
Tianqi’s lawyers said they were “very satisfied” with the ruling.
The initial lawsuit, brought by SQM majority shareholder Julio Ponce Lerou, was intended to scuttle an agreement struck between Chile’s antitrust regulators and Tianqi.
Ponce’s lawyers argued the deal had been struck “practically in secret” and that it failed to protect SQM’s corporate secrets from top competitor Tianqi.
The decision, passed by three to two votes, removes yet another obstacle for Canadian fertilizer producer Nutrien (NTR.TO), which owns the near one-quarter stake in SQM and must sell its shares by April 2019 in order to comply with regulatory requirements put in place by Indian and Chinese authorities following a prior merger.
The court’s decision is final and not subject to appeal but one legal hurdle remains. Ponce’s Pampa Group, which controls SQM, earlier this month filed an additional appeal with Chile’s TDLC antitrust court.
Nutrien has previously argued that the “real objective” of Ponce’s legal maneuvers is to block the sale to Tianqi and force Nutrien to “miss its deadline with Indian and Chinese regulators.”
Pampa has said it is concerned Tianqi, which controls Talison Lithium, a joint venture with No. 1 lithium producer Albemarle Corp (ALB.N) in Australia, could share secrets with its U.S.-based competitor and neighbor in Chile’s lithium-rich Salar de Atacama.
Tianqi’s bid to acquire the stake comes as Beijing is aggressively promoting electric vehicles to combat air pollution and help China’s domestic carmakers build global brands.
The high-grade lithium mined by SQM in Chile’s Salar de Atacama is a key ingredient in the batteries that power everything from cell phones and tablets to electric cars.
Source: Reuters.com