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May 17 (Reuters) - Canadian fertilizer company Nutrien Ltd will sell a stake in Chilean lithium producer Sociedad Quimica Y Minera (SQM) to China’s Tianqi Lithium Corp for $4.07 billion, Nutrien said on Thursday.
Nutrien, formed by the merger of Agrium and Potash Corp of Saskatchewan, must sell its stake in SQM - which has a significant fertilizer production business - by next March as part of a commitment to regulators approving the merger.
Tianqi is buying 62.5 million Class A shares of SQM and will pay $65 per share in cash to Nutrien.
The Chinese lithium producer’s interest in SQM comes during an aggressive push for electric vehicles by Beijing to combat rising pollution levels. Lithium is a major ingredient used in rechargeable lithium-ion batteries.
Nutrien, which owns about 30 percent of SQM, plans to sell 20.2 million B shares of the company in the future.
SQM’s U.S.-listed shares rose 1.44 percent to $59.00 in premarket trading on Thursday.
Reuters reported earlier this week that Tianqi and SQM were in talks for a deal. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sai Sachin Ravikumar)