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Tianqi agrees to purchase Nutrien's SQM ‘A share’ investment

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World Fertilizer,

Nutrien Ltd has announced that it has signed an agreement with Tianqi Lithium Corp., under which Tianqi has agreed to purchase 62 556 568 ‘A shares’ of Sociedad Química y Minera de Chile S.A. (SQM) held by Nutrien for consideration of US$65 per share in cash.

This transaction represents the entirety of Nutrien’s ‘A shares’ at a gross valuation of approximately US$4.07 billion. SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilizers and industrial chemicals.

In the statement, Nutrien claims that it still retains ownership of 20 166 319 SQM ‘B shares’, and expects to divest these shares in due course.

The President and CEO of Nutrien, Chuck Magro, said: “The announced sale of the majority of our SQM holdings marks another key integration milestone for Nutrien. With growing free cash flow, combined with the significant proceeds from this sale, Nutrien further enhances our balance sheet and liquidity, and places us in a strong position to execute on our capital allocation priorities.”

The President of Tianqi Lithium, Vivian Wu, added: “This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy. Tianqi Lithium's shareholders will greatly benefit from this transaction given SQM's long-term stable financial returns and steady dividends.”

Nutrien’s sale of its SQM holdings was required by the Competition Commission of India and Ministry of Commerce in China in providing clearance for the merger of Agrium and PotashCorp which formed Nutrien. The agreement is subject to customary closing conditions, including regulatory approvals and Tianqi Lithium shareholder approval, and is expected to be completed by 4Q18.

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Potash Corp news Agrium news