Lithium mining, chemicals and battery company Galaxy Resources Limited (ASX:GXY) has announced a friendly $109 million takeover of Canadian lithium and potash exploration and development company Lithium One.
Galaxy says the merger will create a vertically integrated lithium company with Galaxy’s resource base receiving a boost through Lithium One’s $US1 billion Sal De Vida lithium potash project in Argentina.
The deal has been unanimously backed by both company boards and Galaxy has urged its shareholders to vote in favour of the merger at its Annual General Meeting next month.
Managing Director Iggy Tan says Galaxy will require more lithium resources over the next few years and the latest acquisition will significantly add to its existing Australian resource inventory and enable its resources to grow.
Shares in Galaxy Resources last traded at $0.885.
In the first half of its 2012 financial year Galaxy Resources booked a net loss of $131.9 million.
