To cater to the increasing demand for integrated lithium chemicals Allkem and Livent announced to form new entity that focuses on lithium production. 

United States: Allkem Limited and Livent Corporation, announced that they have entered into a definitive agreement to combine the two companies to create a leading global integrated lithium chemicals producer. The combined company will headquarter in United States whose name is unknown or “NewCo” until the final agreement.

The transaction is expected to close in the fourth quarter of 2023 and is subject to customary closing conditions, including regulatory approvals. Upon closing, Allkem shareholders will own approximately 56% of the combined company and Livent shareholders will own approximately 44%. The combined company will have a significant footprint of low-cost assets diversified across key geographies, products, and customers. Allkem and Livent have complementary assets and operations, including:

        ·         Allkem’s lithium operations in Argentina and Australia

        ·         Livent’s lithium operations in Argentina and the United States

        ·         Allkem’s lithium hydroxide and lithium carbonate products

        ·         Livent’s lithium specialties products

Both companies have a global customer base that includes leading battery and electric vehicle manufacturers. Currently, Allkem Ltd. operates in Jujuy Province, Argentina; Jujuy, Argentina; Catamarca, Argentina; Western Australia, Australia; Naraha, Japan; and Québec, Canada. Whereas Livent Corp. currently operates manufacturing sites in Bessemer City, North Carolina; Bromborough, England; Fenix, Argentina; Zhangjiagang, China; Güemes, Argentina; and Rugao, China

The combined company will be well-positioned to meet the rapidly growing demand for lithium chemicals, which is being driven by the global transition to electric vehicles. The combined company is expected to generate annual revenue of approximately USD 2 billion and produce a combined 60,000 metric tons of lithium chemicals annually.

During the merger process and formation of “NewCo”, Gordon Dyal & Co., LLC. is acting as exclusive financial advisor and Davis Polk & Wardwell LLP and Allens are acting as legal counsel to Livent Corporation. UBS Securities Australia Limited and Morgan Stanley & Co. LLC are acting as financial advisors and King & Wood Mallesons and Sidley Austin LLP are acting as legal counsel to Allkem Limited.

According to the Livent President and Chief Executive Officer, Paul Graves "I am excited for what lies ahead as Livent and Allkem combine forces to help power the transition to EVs, cleaner energy and a more sustainable future. We look forward to playing an even bigger role in the acceleration of decarbonization policies by providing the lithium needed to enable this critical global energy shift. As a combined company, we will have the enhanced scale, product range, geographic coverage, and execution capabilities to meet our customers' rapidly growing demand for lithium chemicals. This transaction will capitalize on our highly complementary business models and our collective strengths, including our best-in-class technologies, assets, and people, to be a leading force in our industry driving growth in EV and energy storage applications. Together we can accelerate our growth plans and deliver more lithium, more reliably, and more quickly, than either of us can do alone. Jointly, we are committed to growing responsibly and supporting the communities where we operate, and we look forward to executing on our shared long-term vision." Further, the Allkem's Chief Executive Officer, Martín Pérez de Solay, stated that "the combination of Allkem and Livent is transformational with compelling strategic logic and marks a significant milestone in our efforts to grow the company. 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. The vertically integrated “NewCo” will improve delivery of high-quality, value-added products to our diverse customer base and unlock material synergies. The combination brings together teams with strong expertise in project development, product innovation, and marketing, and sets us up for a faster and de-risked delivery of the next phase of our growth. 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. We will maintain our joint commitment to safety, quality, and productivity and through increased scale we can also improve outcomes for our employees, customers, partners, and the communities in which we operate."

According to TechSci Research, the merger of Allkem and Livent is expected to have a positive impact on the electric vehicle and energy sectors. The combined company will be a leading global producer of lithium chemicals, which forms a key component in lithium-ion batteries and make them more affordable. By this merger, it is expected that the new identity named “NewCo” will become third largest company in the world by 2027. The merger will create a more vertically integrated company with a broader range of assets and products, which will make it better able to meet the growing demand for lithium chemicals from the electric vehicle market.

After the merger it is expected that “NewCo” will produce lithium more easily and larger in quantity due to their increased efficiency and save more money, which will benefit the combined company's customers. This will make lithium-ion batteries more affordable and help to make electric vehicles more competitive with gasoline-powered vehicles. Along with affordable lithium, this merger will create a company with a broader geographic footprint, which will make it better able to weather economic downturns and other challenges. Additionally, this new company will help to ensure a reliable supply of lithium chemicals and lessen the dependency on Chinese companies.