Allkem chairman Peter Coleman says outlook bright after shareholders approve Allkem’s $16bn merger
Allkem investors overwhelming back its proposed merger with US player Livent, which will create a global lithium giant with assets in Australia, plus South and North America.
ASX-listed Allkem’s proposed $16bn merger with Livent has sailed through the company’s shareholder vote, winning the support of about 89 per cent of shares voted at the meeting.
The result is in line with proxy votes cast ahead of the meeting on Tuesday, approving the company’s plans for a blockbuster lithium merger with US-listed Livent, to create a major global lithium company with assets in Australia, and both South and North America.
Only 10.7 per cent of shares were cast against the merger, with Australian superannuation major Ausbil one of only few to go public opposing the deal on valuation grounds.
The deal still needs the approval of Livent shareholders at am overnight meeting, and then the final tick-off of the federal court on December 20.
Speaking after the vote, Allkem chairman Peter Coleman said the significant work conducted by the management of both sides of the transaction meant the company was ready to enter the new year “at full pace”, as a market downturn put pressure on exploration hopefuls wanting to muscle into the global lithium market.
Falling lithium prices have hit the valuation of most of Australia’s lithium majors over the last year, with Allkem being no exception.
Excitement at the junior end of the market has largely been reliant on the fight for control of a small number of lithium explorers in WA amid strong interest in the sector from international majors such as SQM and Albemarle, and WA’s mining billionaires Gina Rinehart and Chris Ellison.
But Mr Coleman said the more difficult outlook for the battery making commodity was not a concern for the merged company, to be named Arcadium Lithium, which will have lithium production hubs in Argentina, Western Australia and chemical processing capabilities in the US and China.
“Where it will be tough will be those who are needing funding for moving projects forward, and for those who are in the middle of major projects that were relying on future revenue streams to fund those projects,” he said.
“That is not us. We’re able to fund our projects from our existing revenue stream or bank balance. Our organic projects are already well funded, but I think 2024 is going to be tough for those who were relying on higher prices to fund the projects that are currently being built.”
The two companies have said their combined growth plans should deliver production capacity of 248,000 tonnes of lithium carbonate equivalent by 2027 – making Arcadium the third-largest producer in the world behind Albemarle and SQM, and ahead of China’s Ganfeng, assuming none of its rivals grow their own production base further.
Allkem shares were down 0.8 per cent $10.57 in a higher market in late afternoon trading.