Lithium producers Livent and Allkem to merge companies
Lithium companies Livent and Allkem are merging in a US$10.6 billion stock deal to create the world’s third-largest producer of lithium chemicals by volume.
The merger between US-based Livent and Australian-based Allkem is expected to close this year. The resulting new company will be headquartered in the USA and listed on Wall Street. It does not yet have a name, but it is clear that it will be led by former Livent boss Paul Graves as CEO and former Allkem boss Peter Coleman as chairman of the board.
In the automotive sector, this development in the lithium market is being closely watched; after all, Tesla, BMW and General Motors are among Livent’s lithium customers. The group became independent in 2018 when it was spun off from US chemical company FMC Corporation. Allkem, in turn, was formed in 2021 through the merger of Galaxy Resources and Orocobre.
According to Reuters, both companies operate lithium brine plants in Argentina, which are only about ten kilometres apart. They are also both building lithium mines in the Canadian province of Quebec, less than 100 kilometres apart. The merger should accelerate the development of these projects, the new CEO Graves is quoted as saying in the news agency report. And: “To develop more lithium projects, you need to be big enough to finance, you need access to resources and you need technical expertise. Combining the two companies helps us with all of those areas” Allkem also produces hard-rock lithium in Australia, according to Reuters, has a chemical conversion plant in Japan and is skilled at so-called direct lithium extraction (DLE).
Graves, meanwhile, is promoting signing a free trade agreement between the US and Argentina to make Argentine lithium compatible with EV tax credits, against the backdrop of the US Inflation Reduction Act. As part of the deal between Livent and General Motors, the lithium producer already pledged that while the lithium for GM would be sourced from Livent’s operations in South America, the processing of the material would increasingly move to the US over the life of the contract – with the aim of later moving Livent’s downstream lithium hydroxide processing for GM entirely to North America.
Their merger would make Livent and Allkem the world’s third-largest lithium producer by volume. Only Albemarle, based in the US, and SQM, based in Chile, are bigger. Other competitors in the industry include Ganfeng Lithium Group and China’s Tianqi Lithium Corporation.