Proxy adviser Glass Lewis backs Livent-Allkem merger

The news: Proxy adviser Glass Lewis has thrown its support behind an Allkem-Livent merger, urging Allkem shareholders to back the deal and create the world's highest volume lithium producer, the Australian Financial Review reports.

The numbers: Under the deal, for each Allkem share owned, shareholders would receive one share in the combined, US-listed entity, Arcadium Lithium. Livent shareholders would receive 2.406 Arcadium shares per security. Livent’s market capitalisation is roughly $US2.47 billion ($3.74 billion) while Allkem’s is $5.4 billion, and both valuations have been sliding ahead of the proposed deal.

The context: If the merger goes ahead, Arcadium might not be the number one lithium producer for long, with Western Australia's $10.9 billion Pilbara Minerals and Canada's $5 billion Sigma Lithium expecting to boost production in 2024, according to the AFR.