Two Lithium Miners Active In Argentina Merge In $10.6B Deal

Allkem and Livent, which operate in Argentina’s Catamarca and Jujuy provinces, will merge to create the world’s third-largest producer, with a valuation of $10.6 billion

Allkem and Livent are the only two companies currently producing lithium carbonate in Argentina.
May 10, 2023 | 01:50 PM

Buenos Aires — Two of the world’s leading lithiun producers, US company Livent (LTHM) and Australia’s Allkem, have announced a “merger of equals” to create a company valued at $10.6 billion, and which are the only two companies that produce lithium carbonate in Argentina.

“A leading global producer of lithium chemicals is created, with combined pro forma 2022 revenues of approximately $1.9 billion and adjusted EBITDA of approximately $1.2 billion,” the companies said in announcing the deal.

“The transaction is expected to be finalized by the end of 2023, and upon closing of the merger of equals, Allkem shareholders will own approximately 56% and Livent shareholders will own approximately 44% of ‘NewCo,’” Alkem and Livent stated.

The merged company will aim to achieve an annual production capacity of approximately 250 kilotonnes of lithium carbonate equivalent (LCE) by 2027.

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Critical scale

As communicated by Livent, the business’s critical scale and global capabilities are immediately increased as a result of the deal, “strengthening the ability to serve customers with a more resilient supply chain.”

Allkem was founded in 2021 from the merger of Orocobre and Galaxy Resources.

The two companies highlighted “the geographically adjacent portfolio of high-quality, low-cost assets in Argentina and Canada, which creates opportunities to accelerate and de-risk the development of a strong pipeline of attractive growth projects”.

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The merger provides for “significant expected operating synergies of approximately $125 million per year (pre-tax) and non-recurring capital savings of approximately $200 million.”

Lithium exploration advances in Argentina, but now with a state-owned company.dfd

Allkem and Livent in Argentina

Allkem and Livent are the only two companies currently producing lithium carbonate in Argentina, at the Fenix projects in the Salar de Hombre Muerto (Livent), in Catamarca, operational since 1998 ,and the Salar de Olaroz (Allkem), in Jujuy province, producing since 2018.

The production of both companies combined generated exports in Argentina worth $696 million.