Allkem shareholders approved a $10.6 billion Livent lithium merger, according to Reuters


© Reuters. FILE PHOTO: Lithium producer Livent Corp’s processing plant is seen in Belmont, Gaston County, North Carolina, U.S. July 15, 2021. Picture taken July 15, 2021. REUTERS/Ernest Scheyder

By Scott Murdoch and Melanie Burton

SYDNEY (Reuters) – Investors in Australian lithium producer Allkem voted on Tuesday to accept a $10.6 billion merger offer from U.S. giant Livent ( NYSE: ) that would create one of the world’s biggest lithium companies.

Allkem said in a regulatory filing that 72% of shareholders who voted in favor of the transaction were in favor of the transaction, with nearly 90% of the total votes cast in favor of proceeding with the transaction.

Livent said last week it had received all regulatory approvals for the deal, which will create a company called Arcadium Lithium. Its shareholders will vote later on Tuesday.

Arcadium Lithium will have an extensive footprint across the major production regions of Australia, Argentina and Canada, operating across the entire supply chain from mining to supplying finished chemicals to battery manufacturer customers.

The mega deal is set to be one of the first to be completed in a wave of deal activity that has surged as lithium prices have fallen this year, with companies overlooking slower-than-expected take-up of electric vehicles in the bank on long-term demand.

“It’s been a tough year for the lithium industry,” Allkem chairman Peter Coleman said at the AGM.

In Australia, Chile’s SQM and Australia’s richest person, Gina Rinehart, on Tuesday sweetened their bid for lithium developer Azure Minerals to A$1.7 billion ($1.14 billion).

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As part of the Allkem-Livent deal, Allkem shareholders will receive one share of Arcadium Lithium for each share they own, ultimately owning 56% of the new company.

Livent shareholders will receive 2,406 shares in the new firm for each existing share, and Livent CEO Paul Graves will take the top job.

The new company will be the world’s third-largest producer of the key metal used in electric car batteries, after the US Albemarle (NYSE: ) and SQM in Chile.

The transaction was recommended by independent experts in a report compiled by Kroll Financial Advisors. Major proxy advisory firms also advised investors to vote in favor of the deal.

Livent’s Graves told Reuters in November that the new company would like to expand its existing asset base in Western Australia’s prime lithium districts.