UPDATE 1-Allkem to buy US lithium producer Livent Corp to create .6 bln firm


(Updates with shareholding patterns, company statements and background in paragraphs 2-8)

May 10 (Reuters) – Australian lithium miner Allkem Ltd has inked an agreement to acquire U.S.-based chemical manufacturing firm Livent Corp in a deal that will create a $10.6 billion entity, the two companies announced on Wednesday.

Following the transaction, Allkem will own 56% of the new firm, with the remaining stake going to Livent.

Allkem shareholders are set to receive the right to one share of a new public holding company for each existing Allkem share, while Livent shareholders will receive 2.406 shares in the new firm for each existing Livent share.

Allkem shares have risen 15% so far this year as demand for lithium, a key material in electric vehicle batteries, from automakers grows strongly. Global demand for the metal is expected to surge more than five-fold by 2030.

The deal comes as Australian lithium miners have been fending off takeover attempts by U.S.-based commodity producers. In March, Liontown Resources rebuffed a A$5.50 billion buyout bid from Albemarle Corp.

Allkem, formed as a result of a scrip merger between miners Galaxy Resources and Orocobre in 2021, has a market capitalisation of A$8.23 billion ($5.58 billion).

The ASX-listed company conducts drilling activities predominantly at the Olaroz and Mt Cattlin facilities in Argentina and Australia, respectively, while Livent’s Hombre Mureto lithium project is about 200 kilometres from Olaroz.

Livent, based in Philadelphia, supplies the battery metal to multiple U.S. automakers, including such as General Motors Co , Tesla Inc and BMW.

The current chair of Allkem, Peter Coleman, will remain the chairman of the new firm, while Livent’s Paul Graves is set to be the chief executive. ($1 = 1.4743 Australian dollars) (Reporting by Harish Sridharan and Rishav Chatterjee in Bengaluru and Scott Murdoch; Editing by Sonia Cheema and Janane Venkatraman)



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