Reliance Industries Ltd (RIL), through its arm Reliance New Energy Ltd (RNEL), is in pact to acquire the assets of cobalt-free lithium battery technology and manufacturing company Lithium Werks for a total transaction value of $61 million, the Mukesh Ambani-led conglomerate said on March 14.
The acquisition will provide RNEL access to Lithium Werk’s cobalt free and high-performance lithium iron phosphate (LFP) batteries manufacturing and technology. RNEL said that Lithium Werks is well positioned to leverage on the opportunity arising from the recent resurgence in demand for LFP batteries given its portfolio of integrated solutions.
“LFP is fast gaining as one of the leading cell chemistries due to its cobalt and nickel free batteries, low cost and longer life compared to NMC (nickel, manganese and cobalt) and other chemistries. Lithium Werks is one of the leading LFP cell manufacturing companies globally and has a vast patent portfolio and a management team which brings tremendous experience of innovation across LFP value chain,” Ambani, RIL's chairman, was quoted as saying in the statement.
The transaction is a part of RIL’s strategic plan to invest Rs 75,000 crore over the next three years to build a new clean energy business to fuel its commitment to be net carbon neutral by 2035.
The acquisition will include Lithium Werks’ entire patent portfolio, manufacturing facility in China, key business contracts and hiring of existing employees as a going concern. The company has an intellectual property (IP) portfolio of around 219 patents related to LFP process and technology, IP driven product development pipeline, and an integrated cell manufacturing capability.
The transaction is subject to certain regulatory and other customary closing conditions and is expected to complete by June 2022.
Joe Fisher, co-founder and chief executive officer of Lithium Werks, said, “This deal means increased resources and expanded global reach, while leveraging our experienced team and IP portfolio and providing scale and momentum to help drive our product innovation, capacity expansion and accelerate our clean energy strategy.”
Prior to this deal, RNEL acquired Faradion, a UK start-up developing sodium-ion batteries for GBP 100 million, with plans to invest another GBP 25 million into the company for the commercial rollout of products, including batteries for electric vehicles. Now with the acquisition of Lithium Werks, the Indian conglomerate will beef up its technology portfolio for battery cells that can enable it to build large scale battery manufacturing facilities.
“Along with Faradion, Lithium Werks will enable us to accelerate our vision of establishing India at the core of developments in global battery chemistries and help us provide a secure, safe and high-performance supply chain to the large and growing Indian EV and Energy Storage markets,” Ambani said.
Covington & Burling LLP acted as the legal advisor and Deloitte as the accounting and tax advisor to RIL on this transaction.
In 2021, Ambani announced an ambitious plan of investing Rs 75,000 crore over the next three years to build a new clean energy business, aimed at the company’s commitment to be net carbon neutral by 2035.
The plan entails three parts—investment of Rs 60,000 core in four giga factories that would manufacture and fully integrate all the critical components, investment of Rs 15,000 crore in building the value chain, partnerships and future technologies, including upstream and downstream industries; and repurposing the company’s engineering, project management and construction capabilities toward clean energy.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
