Electric-vehicle battery maker Contemporary Amperex Technology (CATL) has signed a definitive arrangement agreement to acquire Millennial Lithium in a $297m (C$377m) all-cash offer.

According to the transaction, the Chinese battery manufacturer will purchase Millennial by paying C$3.85 per share in cash.

Millennial said that CATL’s offer represents a 6.9% premium over Ganfeng’s bid, which was C$3.60 per share (C$353m).

Millennial terminated its arrangement with Ganfeng Lithium after receiving a non-binding proposal from CATL on 8 September.

In a press statement, Millennial said it had notified Ganfeng that this proposal constituted a ‘Superior Proposal’ in accordance with the Ganfeng Arrangement Agreement.

The firm says: “Ganfeng elected not to exercise its right to match and, as a result, Millennial terminated the Ganfeng Arrangement Agreement in accordance with its terms and entered the CATL Arrangement Agreement.”

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By GlobalData

CATL also reimbursed a $10m termination fee to Millennial, which would be paid to Ganfeng.

Millennial expects the transaction to remove future dilution risk associated with funding development of the Pastos Grandes project in Salta Province, Argentina.

Subject to regulatory and other customary closing conditions, the deal is scheduled to close in Q4 2021 or January 2022.

CATL expects the acquisition to secure a stable long-term supply of lithium, reported Reuters.

The deal comes amid surging prices of battery-grade lithium carbonate in China. The price has more than tripled this year due to increasing demand for EV vehicles, according to the news agency.

AVZ Minerals recently secured $240m in funding from a private investment firm, jointly owned by CATL, to develop a lithium and tin project in the Democratic Republic of Congo (DRC).