Allkem: Merger news delivers unexpected boost

About the author:

Author name:

By Max Vickerson

Job title:

Analyst

Date posted:

12 May 2023, 7:30 AM

Sectors Covered:

Industrials, New Energy

• Allkem (ASX:AKE) is set to merge with Livent (NYSE:LTHM) in a 56/44 split that roughly aligns with each company’s market cap prior to the announcement. LTHM’s shares lifted ~5% overnight and AKE closed up 16%.
• The appeal of the merger is in the extraction of synergies. Both companies have brine operations in Argentina and spodumene projects in Quebec. LTHM also uses more advanced brine processing techniques that could drive better performance at AKE’s projects.
• We reduce rating to HOLD given the very strong performance today on a revised price target of (login to view).

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