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Paladin Energy Ltd (ASX:PDN) has been cleared by Canadian authorities to progress its acquisition of Fission Uranium Corp. (TSX:FCU, OTCQX:FCUUF) through a court-approved plan of arrangement under the Canada Business Corporation Act.
On December 18, 2024, Paladin obtained the final regulatory clearance from the Minister of Innovation, Science and Industry under the Investment Canada Act (ICA Clearance).
The conditions were imposed following an investigation into efforts by Chinese interests to obstruct the acquisition.
Canadian Industry Minister Francois-Philippe Champagne initiated a national security review after China General Nuclear Power Corporation, a state-owned enterprise holding an 11.3% stake in Fission, sought to derail the Paladin transaction during a shareholder meeting in September.
Completion is now anticipated by early January 2025.
Meeting conditions
Paladin has committed to several undertakings as part of the acquisition process. A majority of its board must remain independent, as defined by the listing rules of the Australian Securities Exchange (ASX) and the Toronto Stock Exchange (TSX).
Additionally, Paladin is required to appoint a Canadian citizen, who ordinarily resides in Canada, to its board within 12 months. All senior executives must also be independent, meaning they must have no current or prior contractual, financial, or fiduciary ties with any Chinese state-owned enterprise.
Furthermore, Paladin has agreed not to sell uranium produced from the PLS uranium project in Canada to any customers, distributors or end-users in China, except under an existing offtake agreement with China General Nuclear Power Group. The company is also prohibited from sourcing finance for the PLS project from China.
Establishing a clean energy leader
Under the arrangement, Fission shareholders will receive 0.1076 Paladin shares for each Fission share held at the effective time. Following the transaction, Paladin’s shares will be listed on the Toronto Stock Exchange (TSX), while Fission’s shares will be delisted from the TSX, OTCQX and Frankfurt Stock Exchange.
Paladin highlighted that the merger, announced on June 24, 2024, would establish a clean energy leader with a robust strategy, leveraging the combined strengths of both companies to drive growth and innovation in the sector.
“We welcome the Government of Canada’s clearance of the acquisition of Fission and believe that this decision will deliver great benefits for our company and its shareholders as well as for stakeholders in Australia, Canada and Namibia,” Paladin CEO Ian Purdy said.
“The combination of Paladin and Fission creates a world-class diverse uranium producer operating in multiple countries, with a high-quality portfolio of production, development and exploration assets.
“The addition of the PLS project in the Athabasca Basin creates a leading Canadian development hub alongside our existing Michelin project, with exploration upside across all the Canadian properties.
“Shareholders of Paladin, including former shareholders of Fission, will benefit from the increased scale of the combined company that will be one of the largest pure-play uranium companies globally, as well as greater exposure to, and interest from, international capital markets.
“We have appreciated the steady and professional approach of all representatives of the Canadian Government and look forward to working with government officials to progress the future development of the PLS project to deliver regional and national benefits.”
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