Lithium producers Allkem and Livent have agreed to an all-stock merger of equals that will value the combined company at $10.6bn.

Upon closing of the deal, shareholders of Australia-based Allkem will own nearly 56% stake in the combined company, while Livent shareholders will hold the remaining 44% stake.

Through the merger, both firms expect to combine their highly complementary portfolio of assets, expansion projects, and operational expertise in extraction and processing under a vertically integrated business model.

With headquarters in the US, Livent claims to have about eight decades of experience in the production of a wide range of lithium chemicals for energy storage and other speciality applications.

Livent president and CEO Paul Graves said: “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.

“This transaction will capitalise on our highly complementary business models and our collective strengths, including our best-in-class technologies, assets, and people, to be a leading force in our industry driving growth in EV and energy storage applications.”

According to Allkem and Livent, the merger will create a global lithium chemicals producer with improved business-critical scale and increased capacity to address the rising customer demand.

Allkem’s portfolio includes a hard rock lithium operation in Australia, lithium brine operations in Argentina, a hard rock development project in Québec, and a lithium hydroxide conversion facility in Japan.

Allkem CEO Martín Pérez de Solay said: “The combination brings together teams with strong expertise in project development, product innovation, and marketing, and sets us up for a faster and de-risked delivery of the next phase of our growth.

“I believe Allkem shareholders will realise significant benefits from the Transaction as the business transforms into a truly global player with listings in the US and Australia.”

The new company is expected to have a primary listing on the New York Stock Exchange (NYSE) and maintain a foreign-exempt listing on the Australian Securities Exchange (ASX).

The transaction is expected to close by the end of this year, subject to receipt of regulatory approvals, along with approval from Livent and Allkem shareholders and other customary conditions.