Shareholders of Australian lithium miner Allkem Ltd. (AU:AKE) gave the green light to the pending merger of equals with American miner Livent Corporation (NYSE:LTHM). At a shareholder meeting today, roughly 90% of shareholders voted, of which 72% favored the deal. Meanwhile, Livent shareholders are due to vote on the merger later today.
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Allkem explores and develops lithium deposits across Argentina, Australia, Canada, Chile, and the United States. It is the world’s largest producer of lithium carbonate and the fourth-largest producer of lithium hydroxide. Meanwhile, U.S.-based Livent specializes in battery-grade lithium hydroxide, butyllithium, and purity lithium metal. Livent’s operations are spread across North America, Europe, the Middle East, Africa, Latin America, and Asia Pacific.
About the Allkem-Livent Merger
The combined company will be named Arcadium Lithium, which will operate across Australia, Argentina, and Canada and become the world’s third-largest lithium producer. Its products will run across the entire supply chain, from mining to delivering finished chemicals to battery-making customers. Although lithium prices have fallen this year and the demand for EVs has not grown as expected, Arcadium Lithium is expected to become a prominent player in the electric vehicle (EV) space and contribute to the global EV transition.
As per the deal, Allkem shareholders will get one share in Arcadium in exchange for each share held. Allkem shareholders will hold 56% of the merged entity. Livent shareholders will get 2.406 shares in Arcadium in exchange for each share held. Also, Livent’s current CEO, Paul Graves, will lead the merged company.
What is the Future Price of Allkem Stock?
On TipRanks, AKE stock commands a Strong Buy consensus rating based on eight Buys and one Hold rating. Importantly, all these ratings were given before the shareholder vote and are subject to change. The Allkem Limited share price target of AU$13.68 implies 29.3% upside potential from current levels. Year-to-date, AKE shares have lost 4.2% vis-à-vis gaining 17.9% in the past month alone, thanks to the merger news.
