Allkem and Livent announce definitive agreement to combine in an all-stock merger of equals valuing the combined company at US$10.6 billion (A$15.7 billion)
Key Highlights
- Creates a leading global lithium chemicals producer, with pro-forma CY’22 combined revenue of approximately US$1.9 billion and adjusted EBITDA of approximately US$1.2 billion
- Immediately enhances business-critical scale and global capabilities from closing, strengthening the ability to serve customers with a more resilient supply chain
- Vertically integrated business model allows enhanced operational flexibility and potential for greater value capture across the value chain
- Geographically adjacent, high quality, low-cost asset portfolio in Argentina and Canada creates opportunities to both accelerate and de-risk the development of a strong pipeline of attractive growth projects expected to deliver production capacity of approximately 250ktpa LCE by CY’27E
- Significant expected run-rate operating synergies of approximately US$125 million per annum (pre-tax) and one-time capital savings of approximately US$200 million, driven mainly by asset proximity and co-development in Argentina and Canada. Additional synergies expected beyond CY’27E
- Strong combined balance sheet and cash flow generation provide financial flexibility to deliver accelerated growth plans
- Enhanced value proposition for shareholders, customers, employees, and local communities, with an unwavering commitment to sustainability and responsible growth
Allkem (ASX:AKE) and Livent (NYSE:LTHM) today announced the signing of a definitive agreement (“Transaction Agreement”) to combine the two companies to create a leading global lithium chemicals producer (“NewCo”), (the “Transaction”). The Transaction is expected to close by the end of calendar year 2023, and upon closing of the all-stock merger of equals, Allkem shareholders will own approximately 56% and Livent shareholders will own approximately 44% of NewCo.
Allkem and Livent, two global lithium chemicals companies, will combine their highly complementary range of assets, growth projects, and operating skills across extraction and processing under a vertically integrated business model with the scale and expertise to meet the rapidly growing demand for lithium chemical products. The combined company will have a significant footprint of low-cost assets diversified across key geographies, products, and customers. Given the proximity of certain assets in Argentina and Canada, significant cost synergies and capex savings, in addition to other anticipated commercial synergies, are expected to be realized from the opportunity to co-develop and de-risk future expansion projects and operations.
Livent is a global leader in lithium processing technologies with nearly eight decades of experience producing a diverse range of lithium chemicals for energy storage and other specialty applications. Allkem brings complementary expertise in conventional brine-based lithium extraction, hard rock mining, and lithium processing. With Livent’s technical and commercial capabilities and its deep customer relationships, and Allkem’s large and diverse resource base and significant growth pipeline, NewCo will be well-positioned to capitalize on the expected growth in lithium demand from electric vehicles (“EVs”) and energy storage solutions.
Learn more: Livent 