European Lithium Ltd said it would merge with blank-check company Sizzle Acquisition Corp to launch a lithium exploration firm and also sell its stake in the Wolfsberg lithium project.
The merger comes at a time when companies are racing to capitalize on booming prices and demand of lithium, a key component of electric vehicle batteries, amid a global push to reduce carbon emissions.
European Lithium will be issued shares worth $750 million, equal to about an 80% stake in the new lithium exploration company – Critical Metals Corp – which will be listed on the Nasdaq.
Shares of the Australia-listed company soared more than 33% to their highest levels since April 11.
European Lithium said it will have an option to increase its stake by another 10% if some performance-based milestones are met.
The company, which is also listed in Frankfurt, said the implied pro forma market capitalisation of the combined group would be $972 million and the merger will provide Critical Metals about $159 million to develop Wolfsberg.
European Lithium Chairman Tony Sage and Chief Executive Officer Dietrich Wanke will take up the same roles in the combined company after the deal, which is expected to close in the first half of 2023.
Source: Reuters.com