AKE +15.72%: announced a merger with US group Livent (LTHM US) to create the world’s 3rd largest lithium producer forcing shares in lithium miners to squeeze higher today. Allkem shareholders, which was born out of a merger between Galaxy and Orocobre, will own 56% of the combined group, however, Livent’s CEO Paul Graves will be tasked with combining the assets across Canada, Argentina and Australia. The deal is expected to save $US285m in both cost synergies and CAPEX net of the costs involved in pulling the deal together. Talking their own book, the group expects to benefit from its scale attracting customers demanding a large supply of various lithium products, expecting to produce more than 200kt/year of production within 5 years. We suspect there will be plenty more M&A in the space in the near term.
MM is bullish Lithium, owning PLS & GL1
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