Sayona and Piedmont Lithium Forge Merger to Lead North American Market

• Merger creates 50, 50 ownership between Sayona and Piedmont shareholders
• Fixed exchange ratio for share consideration with potential share consolidation
• Transaction contingent on regulatory clearances including CFIUS and antitrust approvals
• Significant equity raises planned to support growth and liquidity
• Governance structure to include equal board representation from both companies

Merger Overview

In a landmark deal for the lithium mining sector, Sayona Mining Limited and Piedmont Lithium Inc. have entered into a definitive merger agreement. The transaction will see Sayona’s wholly owned subsidiary merge into Piedmont, with Piedmont surviving as a wholly owned subsidiary of Sayona. This strategic combination is designed to position the merged entity as a leading hard rock lithium producer in North America, leveraging the complementary strengths of both companies’ asset portfolios.

The merger consideration involves Piedmont shareholders receiving Sayona ordinary shares or American Depositary Shares (ADSs) based on a fixed exchange ratio of 527 Sayona ordinary shares per Piedmont common stock share. A proposed share consolidation by Sayona could adjust this ratio to approximately 3.5 shares per Piedmont share, preserving economic equivalence. Upon closing, Sayona and Piedmont shareholders will each own roughly 50% of the combined company on a fully diluted basis.

Regulatory and Shareholder Approvals

The merger is subject to customary closing conditions, including approval by both Sayona and Piedmont shareholders, as well as regulatory clearances. Key regulatory hurdles include antitrust approvals under the Hart-Scott-Rodino Act, clearance from the Committee on Foreign Investment in the United States (CFIUS), and approval under the Canadian Investment Canada Act. Both companies have committed to use reasonable best efforts to obtain these approvals in a timely manner.

Shareholder meetings are scheduled for mid-2025, with virtual participation options. Both boards unanimously recommend approval of the merger and related proposals, including advisory votes on executive compensation and potential adjournments to secure sufficient votes. Support agreements from Piedmont directors, representing over 1% of shares, further underpin the transaction’s progress.

Financial and Strategic Rationale

The merger is expected to generate significant synergies, including cost savings estimated at $15–20 million annually within two years post-closing. The combined company will benefit from geographic diversification, combining Sayona’s Canadian and Australian assets with Piedmont’s U.S. and Ghanaian projects. Notably, the consolidation of ownership in the North American Lithium project is anticipated to streamline operations and enhance growth potential.

Concurrent equity raises by both companies have already raised $80 million to support ongoing operations and growth initiatives. A further conditional raise of approximately $45 million is planned post-merger, led by Resource Capital Fund VIII, L.P., a major critical minerals investor. These capital infusions are expected to strengthen the balance sheet and provide financial flexibility for the combined entity.

Governance and Management

The governance structure post-merger will feature equal board representation, with four directors appointed by Sayona and four by Piedmont, including independent directors. Sayona’s current CEO, Lucas Dow, will continue as CEO of the combined company, while Piedmont’s Keith Phillips will serve as strategic advisor during a transition period. The merged company will maintain its primary listing on the Australian Securities Exchange (ASX) and a secondary listing on Nasdaq, with expected ticker symbols ELV and ELVR respectively, subject to shareholder approval of a name change to Elevra Lithium Limited.

Risks and Considerations

Investors should note that the merger’s completion depends on regulatory approvals and shareholder votes, which may face delays. The tax treatment under U.S. law, particularly Section 367(a), remains uncertain and could result in taxable gains for U.S. holders. Market price volatility of Sayona shares may affect the ultimate value of the merger consideration. Integration risks, including the realization of synergies and retention of key personnel, also present challenges.

Both companies have disclosed detailed risk factors, including operational, regulatory, market, and financial risks, which investors should carefully consider. The merger agreement includes customary representations, warranties, covenants, and termination provisions, with termination fees payable under specified circumstances.

Bottom Line?

As the merger advances toward shareholder votes and regulatory clearances, market participants will closely watch for any shifts in valuation, regulatory hurdles, or integration challenges that could shape the future of North American lithium supply.

Questions in the middle?

• Will U.S. regulators impose conditions that could delay or alter the merger?
• How will the tax uncertainties under Section 367(a) affect U.S. Piedmont shareholders?
• Can the combined company successfully realize the projected $15–20 million annual cost synergies?
• What impact will the proposed Sayona share consolidation have on liquidity and shareholder value?
• How will the governance balance between Sayona and Piedmont influence strategic decisions post-merger?