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Ahead of Rio Tinto buyout, Arcadium's earnings dips on moving lithium prices

Arcadium, the lithium producer that has consented to sell itself to Rio Tinto, published an 82% drop in quarterly earnings on Thursday that missed Wall Street's expectations due to sliding prices of the electric vehicle battery metal.

Much of the lithium industry is competing with a supply glut brought on in part by a softening of aggressive EV adoption rates and oversupply from China. Yet that market imbalance is predicted to end later on this years, making Arcadium's portfolio of leading lithium projects across the globe a prime target for Rio, which is paying $6.7 billion for the company.

Rio CEO Jakob Stausholm initially approached Arcadium about a. prospective deal in June and the mining giant's board proposed. $ 5.25 per share, an offer that Arcadium's board declined,. according to a recent regulative filing.

Negotiations continued and Arcadium ultimately accepted. supply Rio with sensitive service details, according to. the filings. Reuters was very first to report the two sides remained in. settlements in early October, and five days later on both sides. consented to a sweetened deal of $5.85 per share in money.

We are delighted that this deal will provide us the. opportunity to speed up and expand our technique, Arcadium CEO. Paul Graves said in a declaration on Thursday.

Arcadium published third-quarter net income of $16.1 million,. or 1 cent per share, compared to $87.4 million, or 17 cents per. share, in the year-ago quarter. Experts had actually expected revenues. of 4 cents per share, according to IBES information from LSEG.

Shares of the Philadelphia-based company were the same in. after-hours trading. They fell about 1% on Thursday to close at. $ 5.38.

Offered the Rio buyout, slated to close next year, Arcadium. does not prepare to hold a conference call to discuss the outcomes.

(source: Reuters)