Lithium chemical firms Allkem and Livent to merge to create $10.6 billion group

Investing.com -- Lithium chemical groups Allkem Ltd (ASX:AKE) and Livent Corp (NYSE:LTHM) have announced plans to merge in an all-stock deal that would create a combined entity valued at $10.6 billion.

In a joint statement on Wednesday, the firms said that the transaction will help meet a "rapidly growing demand" for lithium chemical products. Lithium has become increasingly important as a component in items ranging from rechargeable batteries and laptops to electric vehicles (EVs), according to the London-based Royal Society of Chemistry.

Under the terms of the deal, shareholders will receive one share of the new company for each Allkem share owned, while stockholders will have access to 2.406 shares in the group per Livent share held. Following the tie-up, Allkem and Livent shareholders are expected own approximately 56% and 44% of the combined business.

"This transaction will capitalize on our highly complementary business models and our collective strengths, including our best-in-class technologies, assets, and people, to be a leading force in our industry driving growth in EV and energy storage applications," said Livent president and chief executive officer Paul Graves.

Philadelphia-based Livent, a manufacturer of finished lithium compounds, currently has operations in the U.S., England, China, and Argentina. According to Reuters, it supplies raw materials to carmakers like Tesla (NASDAQ:TSLA) and BMW (ETR:BMWG).

ASX-listed Allkem's portfolio includes projects in Argentina, Australia, Canada, and Japan.

The deal, which is still subject to regulatory approval, is expected to close by the end of 2023.