Both Allkem and Livent operate lithium brine facilities in Argentina that are roughly 10 km (6.2 miles) apart, and in the Canadian province of Quebec. Shares of other lithium miners such as Mineral Resources , Pilbara Minerals and Liontown Resources jumped between 2.4% and 7.6%. (Reporting by Archishma Iyer in Bengaluru; editing by Uttaresh Venkateshwaran)
By Archishma Iyer
May 11 (Reuters) - Australian lithium producer Allkem surged more than 14% on Thursday after announcing a
$10.6 billion merger with U.S- based Livent to create
the third-largest producer of the key component used in
electric-vehicle batteries.
Allkem shares soared as much as 14.2% to A$14.740 by 0014
GMT, touching their highest since Nov. 24 and topping gainers on
the ASX 200 benchmark index . Livent, which trades in New
York, finished the session overnight 5.2% higher.
Shareholders of Allkem will get one share in the combined
entity for each of their shares and the company will ultimately
own 56% of the new firm, while Livent will own the rest. The deal is expected to complete by the end of 2023, and the
merged entity will be listed on the NYSE and headquartered in
the United States.
"We see the transaction as value accretive," analysts from
RBC wrote in a research note.
"It presents operational synergies from complementary
assets, scale benefit and further vertical integration and
possible long-term asset/technology upside," they added.
Additionally, Allkem's top shareholder Toyota said earlier
on Thursday that it is "quite positive" about a $10.6 billion
tie-up plan with Livent Corp.
Lithium and other allied components have picked up demand in
the recent past as companies look towards expanding their
portfolios towards sustainable energy.
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