RIL subsidiary Reliance New Energy Limited (RNEL) is set to substantially acquire most of the assets of Lithium Werks BV for a total transaction value of US$ 61 Million. It includes funding for future growth. RNEL will own Lithium Werks’ patents which are about 219 patents (400 as per the 2018 press release), a China-based factory with integrated cell manufacturing capability (60-hectare factory and associated facilities in China as per the 2018 Press release on the construction of Giga factory in China, investment worth 1.6 billion euros), and key business contracts when the deal goes through. RNEL will hire the existing employees as a going concern.
Lithium Werks manufactures cobalt free and high-performance Lithium Iron Phosphate (“LFP”) batteries. The company’s proprietary Nanophosphate powder delivers unique power, safety and cycle life performance in addition to being more Environmental, social, and governance (ESG) friendly compared to competing technologies.
The sale is subject to some regulatory and other customary closing conditions. The companies expect the transaction to complete by June 2022.
The legal advisor for the transaction was Covington & Burling LLP and Deloitte provided accounting and tax advice.
Lithium Werks, in 2018, merged with Super B Lithium Power BV from Hengelo and had previously acquired the industrial branch of A123 Systems LLC and the entire company Valence Technology Inc. In 2020, a part of Valence Technology was sold to another Lithium manufacturer.
At the beginning of the year, Reliance New Energy Solar Ltd (RNESL) announced the acquisition of U.K. based Faradion Limited (Faradion) for 100 Million British Pounds.
The acquisition of both these companies will enable Reliance to establish an end-to-end battery ecosystem. Reliance now acquires the capability of large scale manufacturing of certain key supply chain materials, such as cathode, anode, electrolyte, and also a cell manufacturing facility as well as it leading IOT/AI capabilities. it gives Reliance the flexibility to produce batteries consisting of different chemistries for various applications across energy storage and mobility and battery module systems. Lithium Werks production facilities have 200 MWh annual production capacity including coating, cell and custom module manufacturing capability.
As per Mukesh Ambani, the Chairman of RIL, LFP is being adopted as the leading cell chemistry due to its cobalt and nickel free batteries, low cost and longer life compared to NMC (Nickel Manganese Cobalt) and other chemistries (like NCA, LMO, LNMO and LCO).
“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,” he said.
LFP batteries do not spontaneously catch fire and are safe. They are cheaper than their li-ion counterparts, especially per charge cycle. For example, in China, LFP car batteries are already being offered for less than a hundred dollars per kWh of storage capacity, the limit below which electric cars will also become cheaper to purchase than petrol cars.
LFP batteries can be charged faster than Li-ion batteries and can withstand higher temperatures; in addition, iron and phosphate are also abundantly available.
The acquisition accelerates Reliance’s cell chemistry technology leadership and the setting up of multi gigawatt hour scale battery manufacturing in India.