Allkem Ltd and Livent Corp have announced that they will merge in an all-stock deal worth $10.6 billion, creating the world’s third-largest producer of lithium, the metal used to make electric vehicle batteries. The merger will help the companies accelerate the development of their lithium projects in Argentina and Canada.
Livent’s shares rose by about 5.4% to $25.53 in late morning trading on the New York Stock Exchange following the announcement. Meanwhile, Allkem’s shares closed up nearly 1% on the Sydney Stock Exchange.
Both companies operate lithium brine facilities in Argentina that are located about 10 km apart, and they are building hard rock lithium mines in the Canadian province of Quebec that are less than 100 km apart. The merger is expected to help these projects develop faster.
In addition to its operations in Argentina and Canada, Allkem produces hard rock lithium in Australia, has a chemical conversion facility in Japan, and is an expert in the nascent field of direct lithium extraction (DLE). DLE is seen as a promising prospect for producing more of the battery metal faster than traditional mining methods.
Under the terms of the deal, which is expected to close by the end of 2023, Allkem shareholders will receive one share in the combined entity for each of their shares, and the company will ultimately own 56% of the new firm. Livent shareholders will receive 2.406 shares in the new firm for each existing share.
The new company will be led by Allkem CEO Martin Perez de Solay, with Livent CEO Paul Graves serving as the executive chairman. Allkem’s Peter Coleman will be the new company’s chairman. The company, which has yet to be named, will be listed on the New York Stock Exchange and headquartered somewhere in the United States.
Livent was formed in 2018 when FMC Corp spun off its lithium division, while Allkem was created in 2021 by the merger of Galaxy Resources and Orocobre. The merger of Allkem and Livent will create a formidable player in the global lithium market, with a diverse range of lithium assets and expertise in direct lithium extraction.
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