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ASX-listed lithiumcompany Allkem inks $US10 billion merger: sources

ASX-listed Allkem, the lithiumproducer formerly known as Orocobre, has struck a $US10 billion ($15 billion)merger agreement with New York Stock Exchange-listed Livent Corp, Street Talkcan reveal.

It is understood the deal, underpinned by rising prices anddemand for the metal used to make electric vehicle batteries, is due to beannounced when US markets open on Wednesday.

Investment banks Morgan Stanley and UBS are advising Allkem.

Allkem’s chairman is former Woodside Energy boss Peter Coleman,who was brought in to replace Martin Rowley last year and oversee ambitiousgrowth plans that involved tripling production by 2026.

The company was created from the $4 billion scrip merger ofOrocobre and Galaxy Resources in 2021 that put it in the world’s top handful oflithium producers.

Allkem’s Mt Cattlin mine in WA makesmost of the money but the company’s growth plans are in its brine operations inArgentina and the James Bay spodumene project in Canada. Interestingly,Livent’s Hombre Muerto lithium brines project in Argentina is about 200kilometres from Allkem’s flagship Olaroz project.

The company has been drilling at MtCattlin as it tries to extend the mine life while ramping up production ofbattery-grade lithium carbonate at the Sal de Vida operations in Argentina.

Allkem, whose major backer is a Toyotaprocurement subsidiary, also has a lithium hydroxide plant in Japan.

The shares last traded at $12.91 andare up almost 17 per cent year-to-date.

Expansion flagged

Livent has previously flagged plans toexpand offshore to meet surging demand, telling another news outlet in Novemberthat it was assessing lithium assets in Canada and other countries to boost itsproduction capacity.

In an interview with Reuters, LiventCEO Paul Graves said: “We see Canada as a core part of our expansion capacity.We have to get bigger. We can’t just sit still.”

Graves said the company was alsointerested in deals in Australia, as well as Argentina, where the firm operatesa lithium brine project.

The deal comes as the share price ofASX-listed Liontown Resources continues its steady climb to $2.89, way abovethe spurned Albemarle offer of $2.50 a share that valued Liontown at $5.5billion.

The Liontown board has already turned down three offers frombattery producer Albemarle – at $2.20, $2.35 and $2.50 per share – despite premiums of up to 67 per cent on offer.