Allkem has a good lithium brine project in Argentina which is in a critical delivery and ramp up phase, and on Wednesday (after close) they announced a friendly merger with US listed Livent (LTMN US). The new company (NewCo) will have a market capitalisation of about A$15 billion, similar in size to Pilbara (PLS), with details outlined below:
- AKE shareholders will receive one share in NewCo for each existing Allkem share
- Livent shareholders get 2.406 shares in NewCo for each existing Livent share. LTHM is trading at $US25.62
- AKE shareholders will own the most ~56% of NewCo, however the Livent CEO will be running the combined entity.
- NewCo’s primary listing will be on the NYSE plus the ASX via Chess Depository Interests (CDI) – the same as what is proposed from Newmont if they get Newcrest.
- They think they can wrap the transaction up by the end of 2023, subject approvals, so both companies will trade in line with each other from here.
MM remains bullish Lithium, viewing the AKE deal as a good one for shareholders
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Lithium Stock Performance – Source Bloomberg
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Lithium Stock Performance – Source Bloomberg
