Phillips 66 to snap up a 16% stake in Australia’s NOVONIX as EV market heats up

3 min read | August 10, 2021 02:56 PM AEST | By Arpit Verma

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Phillips 66 to snap up a 16% stake in Australia’s NOVONIX as EV market heats up — Image source: Mike Flippo, Shutterstock.com

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Summary

Phillips 66 is ready to acquire a 16% stake in Australia-based NOVONIX Limited in a US$150 million deal.

Phillips 66 is engaged in the manufacturing of specialty coke while Novonix is a leading synthetic graphite producer.

The strategic investment made by Phillips 66 will directly support the advancement of the US battery supply chain.

American multinational energy company Phillips 66 (NYSE:PSX) announced that it has entered into an agreement to acquire a 16% stake in Australia-based NOVONIX Limited (ASX: NVX, OTC: NVNXF) under a US$150 million deal.

Novonix is a leading synthetic graphite producer. The company also processes specialty coke, used in the manufacturing of high-end battery anode materials. Novonix holds anode material business in Chattanooga, Tennessee. The graphite producer intends to increase its production capacity of synthetic graphite to 10,000Mtpa by 2023.

Must Watch: 10 Exciting ASX-listed battery metal stocks under $1

The investment made by the oil refiner will help Novonix expand its capacity by an additional 30,000Mtpa, which is expected to complete by 2025.

On the other hand, Phillips 66 is a leading manufacturer of specialty coke, a key element for the production of batteries used in various digital instruments, portable devices, electronic gadgets, and most prominently in electric vehicles.

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The global demand for electric vehicles has been rising and leading agencies of the world foresee that the market is expected to expand several times in the coming years.

Development of the US battery supply chain

Last month, US President Joe Biden announced a new national target for electric vehicles to make up at least half of the new vehicle sales by 2030, in what is being seen as another crucial step towards supporting the transition to the clean and green environment and reducing the greenhouse emissions.

The strategic investment made by Phillips 66 will directly support the advancement of the US battery supply chain for sales into the energy storage system as well as the US electric vehicle market. In addition to that, it will also boost the company's commitment to pursue lower carbon emission solutions. The deal will also give a leg up to NOVONIX’s position in US-based anode production.

Good Read: What are battery metals? Why is their demand growing?

Agreement Terms

Under the agreed terms, Phillips 66 will subscribe for 77,962,578 ordinary shares of NOVONIX for a US$150 million consideration. Apart from that, the company will also nominate one director to Novonix’s board. The transaction is subject to the consent of shareholders of the company.

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