$10.6 billion! Two Lithium Giants Announce Merger

On May 10, Allkem, an Australian lithium chemical company, and Livent, an American lithium industry giant, announced that they had reached a final agreement to merge to form a global integrated lithium chemical producer with an enterprise value of approximately US$10.6 billion.

The deal is expected to close by the end of 2023, and Allkem will own 56 percent of the new company, with Livent owning the rest. The companies said the merger would create the world's third-largest lithium producer based on estimated future production capacity and would be listed in New York.

Allkem shares have risen 15% so far this year on strong demand from automakers for lithium, a key material in electric vehicle batteries. Global demand for the metal is expected to surge more than fivefold by 2030.

Livent has nearly 80 years of experience producing a variety of lithium chemicals for energy storage and other specialty applications, with brine production in Argentina and a hard rock lithium project in Quebec, Canada.

Allkem has extensive expertise in lithium extraction from conventional brines, hard rock mining and lithium processing, with operations in Australia, Argentina and Canada.

The combined revenue of the two companies in 2022 is about US$1.9 billion, and the adjusted EBITDA is about US$1.2 billion; the new company is expected to have an annual production capacity of 248,000 tons of lithium carbonate equivalent (LCE), accounting for about 7% of global production in 2023, second only to Yu Yabao (Albemarle) and Chile Mineral Chemicals (SQM).