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Seeking Alpha contributor Livio Filice wrote that now that Orocobre (TSX:ORL) has reached commercial production, joining a tight oligopoly of larger lithium producers, the company could be a takeover target.
Seeking Alpha contributor Livio Filice wrote that now that Orocobre (TSX:ORL) has reached commercial production, joining a tight oligopoly of larger lithium producers, the company could be a takeover target.
As quoted in the publication:
In my opinion, it is unlikely that Toyota Tsusho will acquire Orocobre because Toyota Tsusho has the off-take rights for the project which is of most interest to a trading house. Trading houses are generally not interested in production of goods but are rather focused on business making and financing.
However, it is a possibility for one of the members of the lithium oligopoly to acquire Orocobre for its ownership position in the Olaroz Project. Based on market valuation of Orocobre, in conjunction with the confirmation of its project figures, it may be more financially sound to acquire Orocobre rather than expanding an existing operation. The investment thesis in Orocobre is that the company has almost de-risked the project entirely, lithium demand is fundamentally strong and flurries of recent industry activities could heighten the tension around this newly established industry jewel.