Allkem share price higher on Livent merger update

This lithium miner's shares are having a decent session. But why?

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The Allkem Ltd (ASX: AKE) share price is pushing higher on Thursday morning.

At the time of writing, the lithium miner's shares are up 2% to $11.54.

Why is the Allkem share price rising?

Investors have been buying the company's shares this morning after it released an update on its proposed merger with Livent Corp (NYSE: LTHM).

According to the release, the proposed merger is gathering pace and completion is becoming more and more likely.

This morning, Allkem revealed that Allkem Livent plc (New TopCo) has filed the necessary paperwork with the U.S. Securities and Exchange Commission (SEC). Furthermore, all competition and foreign investment approvals are expected to be received prior to the proposed closing of the transaction.

In light of this, subject to receipt of all necessary regulatory, shareholder, and Australian Court approvals, and the satisfaction or waiver of other closing conditions, Allkem and Livent are targeting completion of the transaction by the end of 2023.

Allkem expects to dispatch a notice of the meeting and an explanatory statement to shareholders in November. This booklet will contain information about the transaction, including the basis for the board's recommendation, as well as the independent expert's report.

Should you buy Allkem shares?

A number of brokers believe investors should be buying Allkem shares before the merger is completed.

In fact, Morgans has just upgraded the company's shares to an add rating with an improved price target of $15.30. Based on the current Allkem share price of almost 33% for investors over the next 12 months.

It is a similar story for analysts at Citi, which this week put a buy rating and $16.50 price target on its shares. This suggests an even greater upside of approximately 43% from current levels.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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