Livent (NYSE: LTHM), the lithium chemical company today announced a merger with Australian miner, Allkem (OROCF) in a $10.6 billion all-stock deal. The merger is expected to close by the end of this year, and upon closing of the merger, Allkem shareholders will own approximately 56% and Livent shareholders will own the remaining 44% of the newly merged entity. Shares of Livent were down in pre-market trading at the time of writing on Wednesday.
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The merger will create a global lithium chemicals producer, with a pro-forma CY’22 combined revenue of around $1.9 billion and adjusted EBITDA of approximately $1.2 billion. This transaction is expected to have “significant run-rate operating synergies of approximately $125 million per annum (pre-tax) and one-time capital savings of approximately $200 million, driven mainly by asset proximity and co-development in Argentina and Canada. Additional synergies expected beyond CY’27E.”
LTHM stock has soared by more than 25% year-to-date.