The Two Lithium Miners Active In Argentina Merge In a $10.6B Deal

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Allkem (Australia) and Livent (LTHM), Argentina’s only two lithium exporters, have announced a multi-billion dollar merger. The companies operating in Catamarca and Jujuy have launched a new company valued at US$10.6 billion. According to the companies, the new valuation of the combined company, following the merger of all of its shares, will be US$10.6 billion. Upon closing the merger of equals, Allkem shareholders will own approximately 56%, and Livent shareholders will own about 44% of ‘NewCo’.

The merged company will aim to achieve an annual production capacity of approximately 250 kilotonnes of lithium carbonate equivalent (LCE) by 2027. Livent has stated that the business’s critical scale and global capabilities will be immediately increased from the deal, “strengthening the ability to serve customers with a more resilient supply chain.” The companies have also highlighted “the geographically adjacent portfolio of high-quality, low-cost assets in Argentina and Canada, which creates opportunities to accelerate and de-risk the development of a strong pipeline of attractive growth projects.” Additionally, the merger provides for ”significant expected operating synergies of approximately US$125 million annually (pre-tax) and non-recurring capital savings of approximately US$200 million.”

Allkem was formed in 2021 from the merger of Orocobre and Galaxy Resources. The company operates the Olaroz Salt Flat in Jujuy, which has been operational since 2018. Livent runs the Fenix project in the Dead Man’s Salt Flat (Salar de Hombre Muerto) in Catamarca, which has been operating since 1998. The transaction is expected to be finalized by the end of 2023.

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