Allkem (AKE), and Livent (LTHM), lithium chemical producers, announced on Wednesday, that they have entered into a definitive agreement to merge together to create a new company (NewCo.) valued at $10.6 billion. The transaction is expected to close by the end of 2023.
The proposed merger has been unanimously approved by the Board of both the companies.
Livent said in a statement that the merger "Creates a leading global lithium chemicals producer, with pro-forma CY'22 combined revenue of approximately US$1.9 billion2 and adjusted EBITDA of approximately US$1.2 billion
Upon closing of the transaction, Allkem shareholders will hold around 56% and Livent shareholders will hold around 44% of the combined company.
Livent has nearly 8 decades of experience producing a diverse range of Lithium chemicals for energy storage and other specialty applications. Allkem brings expertise in conventional brine-based lithium extraction, hard rock mining, and lithium processing. NewCo will be able to capitalize on the strengths of these 2 companies.
NewCo will be listed on NYSE and will maintain a foreign exempt listing on the ASX. Under the terms of the agreement existing Allkem shareholders will receive one NewCo ASX for each common share of Allkem and Livent shareholders will receive 2.406 NYSE listed common shares of NewCo for each Livent share held.
In premarket activity on the New York Stock Exchange, Livent shares were trading at $23, down more than 5 percent.
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