Allkem, Livent strike mega lithium deal

Lithium chemicals companies Allkem and Livent have locked in an all-stock merger to create a new global player worth $A15.7 billion.

Allkem, formerly known as Orocobre, is chaired by ex-Woodside Energy chief executive Peter Coleman and owns and operates the Mt Cattlin lithium operation situated north of Ravensthorpe.

The miner is also developing hard rock and brine projects across Canada and Argentina with a lithium hydroxide plant capable of producing 10,000 tonnes per annum currently under construction in Japan.

Announcing the deal to the ASX late on Wednesday, Allkem said the merger with Pennsylvania-based lithium chemicals producer Livent would result in revenues in the order of $US1.7 billion ($A2.5 billion) for the new entity.

The merged entity will be named NewCo, with the transaction set to be completed by the end of the 2023 calendar year.

Allkem chief executive Martín Pérez de Solay said the combination was transformational with compelling strategic logic.

“We are bringing together two highly complementary businesses to create a leading global lithium chemicals company, building on Allkem’s demonstrated track record of integration,” he said.

”I believe Allkem shareholders will realize significant benefits from the Transaction as the business transforms into a truly global player with listings in the US and Australia.”

Allkem shareholders will own about 56 per cent of NewCo with Livent shareholders to own the remaining 44 per cent.

UBS Securities Australia and Morgan Stanley & Co were financial advisers and King & Wood Mallesons and Sidley Austin acting as legal counsel to Allkem.

Allkem shares last traded at $12.91.