Chengdu Tianqi agrees to acquire Talison Lithium

TORONTO, Dec. 6, 2012 /CNW/ - Chengdu Tianqi Industry (Group) Co., Ltd. ("Tianqi") today announced that Windfield Holdings Pty Ltd ("Windfield"), a wholly-owned subsidiary of Tianqi, has entered into a definitive agreement with Talison Lithium Limited ("Talison") to acquire all of the shares in Talison that it does not already own in an all cash transaction at a price of C$7.50 per share, by way of a scheme of arrangement (the "Transaction"). The aggregate consideration to be paid to Talison securityholders under the Transaction is approximately C$847 million.

Tianqi's Transaction has the full backing of Talison's board of directors, who have unanimously recommended the Transaction to Talison's shareholders. The Shareholder Meeting to approve the Scheme of Arrangement is expected to be held in late February, 2013.

In addition, Talison's largest shareholders, Resource Capital Fund IV L.P. and Resource Capital Fund V L.P. (collectively, the "RCF Funds"), have each confirmed to Talison that, in the absence of an offer which the RCF Funds determine is superior, each of the RCF Funds intend to vote in favour of the Tianqi Share Scheme in respect of the Talison Shares held by them at the relevant time .

Tianqi intends to finance the acquisition using existing cash on its balance sheet and new debt financing. Commitment letters have been obtained in relation to the external financing and Tianqi is currently seeking to negotiate binding loan agreements. Talison's obligations under the agreement with Tianqi are dependent on Tianqi being able to complete binding financing documentation on satisfactory terms prior to the Scheme Meeting. A deposit amount of US$25 million has been lodged by Tianqi, as a reverse break fee, in an escrow account as a sign of confidence in Tianqi's ability to complete the documentation.

Commenting on the transaction, Tianqi's chairman, Mr Weiping Jiang, said "Tianqi looks forward to partnering with Talison's strong management team to successfully grow and add value to Talison's existing business, including through continued product innovation and enhanced sales channels. I am confident that together, Tianqi and Talison can better serve the existing customers of both companies and encourage the increased adoption of hard-rock lithium."

Tianqi's financial adviser is RedBridge Grant Samuel. Its legal advisers are Linklaters and ZhongLun in China, Allens in Australia and Stikeman Elliott in Canada.

Further Information About Tianqi:

Tianqi is a privately held Chinese company founded in 2003.  Its business activities are primarily conducted through the following subsidiaries:

• Sichuan Tianqi Lithium Industries, Inc. - a Chinese company listed on the Shenzhen Stock Exchange, engaged in the production of lithium carbonate and other lithium products from chemical-grade lithium concentrates sourced from Talison;
  
  
• Sichuan Tianqi Industry Co., Ltd. - a distributor of technical grade lithium concentrates, as the sole distributor for Talison in China;
  
  
• Chengdu Tianqi Machinery - provides spare parts and accessories for machinery and electrical equipment used in the construction, packing and agriculture sectors; and
  
  
• Chengdu Sendasun Agricultural Machinery Co., Ltd. - undertakes research, development, manufacturing and sales of agricultural equipment.

Tianqi and its subsidiaries conduct their operations mainly from China, but have customers, business partners and suppliers in various countries around the world, including Europe, Australia, the United States and Japan.

More information about Tianqi is available from the following website: www.tianqigroup.cn/en/Index/aboutus.html

SOURCE: Chengdu Tianqi Industry Group Co., Ltd

Australia
Greg Baxter, Kreab Gavin Anderson
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Canada
Joshua Goldman-Brown, Kreab Gavin Anderson
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