Allkem, Livent fuse in $15.7bn cross-border deal with the help of top globals

The "transformation" combination will birth a new global lithium chemicals producer

Allkem, Livent fuse in $15.7bn cross-border deal with the help of top globals

Allkem Limited and Livent Corp have fused in a $15.7bn all-stock merger of equals deal with the help of legal teams from King & Wood Mallesons (KWM) and Allens.

The merger, which has been described as “transformational”, and was first announced on 10 May, will see the birth of a new holding company, NewCo, which will have a diversified portfolio of extraction and production facilities, projects and growth opportunities, according to Allkem. The portfolio is said to be perfectly positioned to be a reliable supplier of the lithium that is crucial to international decarbonisation efforts.

KWM explained that Allkem and NewCo will merge via an Australian scheme of arrangement, while Livent and a wholly owned NewCo subsidiary will undergo a US merger. NewCo will primarily be listed on the NYSE, and have a foreign exempt listing on the ASX through the issuance of CDIs to Allkem shareholders.

Once the transaction is implemented, Allkem shareholders are set to hold about 56% of the new company, while Livent shareholders will hold about 44%.

KWM acted as the Australian legal adviser for Allkem, with corporate M&A partner Antonella Pacitti taking the lead on the firm’s team. Partner Roger Davies provided support, along with senior associates Jacob Carmody and Toby Newnes and solicitors Cairo Leicester and Tom Carmody.

KWM’s anti-trust and tax/stamp duty experts and Ninjang team also pitched in.

Pacitti said that the merger, which is set to close by the end of the year, was “indicative of an incredibly exciting market”.

“As energy transition continues to gather pace, we anticipate more of this type of cross border dealmaking”, she explained.

Meanwhile, Livent received legal advice from an Allens team headed by Guy Alexander, who leads the firm’s public M&A team.

“One of the main themes we are currently seeing in global M&A is the drive to secure supply of lithium and other critical minerals, and, more specifically, the drive towards vertically integrated business models across the critical minerals value chain”, Alexander explained. “There is strong government support in the US (Inflation Reduction Act) and the EU (Critical Raw Minerals Act) to diversify global battery supply chains, and this presents valuable opportunities for ‘qualified’ battery material providers in Tier 1 jurisdictions such as Australia”.

He added that there was a “mid-term forecast lithium market deficit, which is expected to grow out to 2040, driven by significant demand and tight supply”. These factors, he explained, would spur interest in the sector in the next few years.

Alexander was supported by M&A specialists including partner Bryn Hardcastle, senior associate Elise Blume, and counsels Dave Filov and Andrew Wong. The tax team also lent a hand, with input from partners Ellen Thomas and Adrian Chek as well as managing associates Jay Prasad and Tom Tian.

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