Carmakers in race to secure battery metals
Carmakers are scrambling to secure battery metals, particularly lithium, which has led to supply deal risks and investments in mines located in far-flung locations with poor governance. London-based special purpose acquisition companies (SPACs) have emerged as a solution to this problem. Stellantis recently invested $100 million in ACG Acquisition’s SPAC to buy the Serrote and Santa Rita mines in Brazil. The deal between Stellantis, Glencore, and other investors gives the carmaker access to critical materials that are developed using green hydroelectric power. Additionally, the valuation of the deal at around 4 times 2024 forecast EBITDA makes it an acceptable option for shareholders.
What is ACG Acquisition?
ACG Acquisition is a London-based SPAC created by Artem Volynets, former boss of EN+ Group, with the goal of acquiring metals for the energy transition such as nickel, which is expected to see a sevenfold increase in demand over 20 years, instead of buying unprofitable tech startups. The public offering to purchase the two mines in Brazil is valued at $1.1 billion.
