Reliance New Energy Limited (RNEL), a wholly-owned subsidiary of Reliance Industries, substantially acquired all assets of Lithium Werks BV, a provider of cobalt-free Lithium Iron Phosphate (LFP) batteries, for $61 million, including funding for future growth.
The acquired assets include 219 patents of Lithium Werks, the manufacturing facility in China, key business contracts, and the hiring of existing employees. The patents are related to the LFP process and technology, including exclusive rights to superior LFP nanotechnology, cell design, proprietary carbo-thermal reduction manufacturing method, and several next-generation electroactive materials.
Lithium Werks was established in 2017 by acquiring certain assets of Valence, a lithium iron phosphate energy storage manufacturer, and the industrial division of A123, a lithium-ion energy storage solution provider.
Lithium Werks has nearly 200 MWh annual production capacity, including coating, cell, and custom module manufacturing capability.
The acquisition is expected to strengthen Reliance’s materials supply chain for large-scale manufacturing and growing electric vehicle (EV) and energy storage markets.
Reliance intends to build a cell manufacturing facility including Internet of Things (IoT) and Artificial Intelligence (AI) capabilities, giving them the flexibility to produce batteries and battery module systems consisting of different chemistries for various applications across energy storage and mobility.
Reliance Industries Chairman Mukesh Ambani said, “Lithium Iron Phosphate 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. We are looking forward to working with the Lithium Werks team and are excited about the pace at which we are progressing towards establishing an end-to-end battery manufacturing and supply ecosystem for India markets.”
The transaction is subject to certain regulatory and other customary closing conditions and is expected to complete by June 2022.
Covington & Burling LLP acted as the legal advisor and Deloitte as the accounting and tax advisor to Reliance on this transaction.
This is the second such deal Reliance has agreed to enter in the past three months. In December, Reliance New Energy Solar Limited acquired sodium-ion battery technology provider Faradion for £100 million (~$110.65 million).
According to Mercom Capital Group’s 2021 Q4 and Annual Funding and M&A Report for Storage, Grid & Efficiency, the sector saw 24 battery storage merger and acquisition transactions during the year.