Lithium producers Allkem, Livent agree $10.6bn tie-up

Australian lithium miner Allkem has agreed to acquire US chemicals firm Livent in a deal worth $10.6bn, it was announced on Wednesday.

The two firms said the all-stock merger would create a leading lithium chemicals producer, with combined 2022 pro-forma annual revenues of $1.9bn and adjusted earnings before interest, tax, depreciation and amortisation of around $1.2bn.

The deal values the combined company, which will be 56% controlled by Allkem, at $10.6bn.

Lithium is used in the manufacture of electric vehicles and demand has been growing sharply in recent years.

Paul Graves, chief executive of Livent, said the tie-up would help "power the transition to electric vehicles, cleaner energy and a more sustainable future".

He continued: "We look forward to playing an even bigger role in the acceleration of decarbonisation policies, by providing the scale, product range, geographical coverage and execution capabilities to meet our customers rapidly growing demand for lithium chemicals."

Martin Perez de Solay, chief executive of Allkem - which has the bulk of its operations in Argentina - said: "The combination of Allkem and Livent is transformational, with compelling logic, and marks a significant milestone in our efforts to grow the company.

"We are bringing together two highly complementary businesses to create a leading global lithium chemicals company. The vertically integrated newco will improve delivery of high-quality, value-added products to our diverse customer base and unlock material synergies."

As at 1215 BST, shares in Sydney-listed Allkem were up 12%, while Livent was down 1% in pre-market trading in New York.