By Ovunc Kutlu
ISTANBUL (AA) - US-based company, Livent, and Australian firm, Allkem, announced Wednesday that they agreed to a $10.6 billion deal to form a global integrated lithium chemicals business.
The deal aims to ensure a more resilient supply chain with a stronger combined balance sheet and cash flow generation for the firms, Livent said in a statement.
The companies expect a $125 million savings in asset optimization and logistics after the merger and a one-time capital expenditure savings of $200 million.
The two companies had a combined revenue of $1.9 billion last year.
While the transaction is expected to close by the end of the year, Allkem shareholders will own 56% and Livent shareholders will own 44% of the new company.
"As a combined company, we will have the enhanced scale, product range, geographic coverage, and execution capabilities to meet our customers’ rapidly growing demand for lithium chemicals," Livent President and CEO Paul Graves said in the statement.
Allkem CEO Martín Perez de Solay said combining the two companies will bring together two complementary businesses in the lithium chemicals industry.