Arverne Group Has Entered Negotiations With Hydro Energy Invest AS With a View to Increase Arverne Group's Participation in Its Subsidiary Lithium de France

Arverne Group is in negotiations with Norsk Hydro's subsidiary, Hydro Energy Invest AS, for Hydro Energy Invest to contribute its shares in Lithium de France in exchange for Arverne Group shares. If completed, this transaction would increase Arverne's stake in Lithium de France and bring Norsk Hydro on as a major shareholder alongside Equinor Ventures, supporting Lithium de France's goal of producing 27 kt of lithium annually by 2031, representing 33% of France's estimated 2035 demand, and becoming the French leader in geothermal energy and lithium.

Analysis

Arverne Group (ARVEN) is advancing negotiations with Hydro Energy Invest AS, a Norsk Hydro subsidiary, for a share-based transaction designed to increase Arverne's ownership in its Lithium de France subsidiary. If completed, this would also establish Norsk Hydro as a key shareholder in Arverne Group, joining Equinor Ventures, thereby reinforcing Arverne's strategic positioning in the renewable underground resources sector. Lithium de France, a pioneer in geothermal heat and lithium production, targets an annual output of 2.2 TWh of geothermal heat and 27 kt of lithium by 2031, utilizing Direct Lithium Extraction (DLE) technology in Alsace; this lithium output is projected to meet 33% of estimated French demand in 2035. A pre-feasibility study has affirmed the project's cost-competitiveness, placing it in the top global quartile for geothermal lithium production, aligning with the anticipated fivefold increase in global lithium demand by 2040 against a backdrop of insufficient supply. The overall sentiment surrounding this development is strongly positive (0.75), with a moderate perceived market impact (0.6), reflecting Arverne's enhanced ambition to become a French leader in geothermal energy and its by-products.

Key Decisions for Investors

• Investors should assess this transaction as a strategic enhancement to Arverne Group's vertical integration in the geothermal lithium value chain, potentially de-risking Lithium de France's development with Norsk Hydro's involvement.
• Closely monitor the finalization of definitive agreements and the outcomes of the forthcoming Definitive Feasibility Study for Lithium de France, which are crucial for validating the 2031 production targets and cost projections.
• Evaluate the long-term investment thesis based on the robust global demand forecast for lithium and Arverne's potential to become a significant, environmentally responsible European supplier.