Reliance New Energy to acquire Lithium Werks for $61 million

On Monday, Reliance Industries made a new acquisition announcement. Through its arm Reliance New Energy Ltd (RNEL), the company plans to acquire the assets of cobalt-free lithium battery technology and manufacturing company Lithium Werks. The transaction value of the deal will be $61 million.

Why is Reliance acquiring Lithium Werks?

• The acquisition will provide RNEL access to Lithium Werk’s cobalt-free and high-performance lithium iron phosphate (LFP) batteries manufacturing and technology.
• LFP is fast gaining leading cell chemistries due to its cobalt and nickel-free batteries. The other reasons for its growing demand are 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 that brings tremendous experience of innovation across the LFP value chain.
• 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.

What is included in the deal?

• With the acquisition, RNEL will own the entire patent portfolio of Lithium Werks. 
• It will also get ownership of manufacturing facilities in China, key business contracts, and hiring of existing employees as a going concern. 
• Lithium Werks 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 deal is 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. Under the same initiative, RNEL acquired Faradion. It is a UK start-up developing sodium-ion batteries for GBP 100 million. It plans to invest another GBP 25 million into the company for the commercial rollout of products, including batteries for electric vehicles.

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.”