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“It’s overwhelmingly positive. On a high level, you have got significant synergies with both businesses having an Argentina base,” said analyst Reg Spencer of broker Canaccord Genuity.
Shares of both companies hit more than three year highs in early trade, with Orocobre gaining about 6% to A$6.56 and Galaxy rising 4% to A$3.75.
Both companies have significant expansion plans, putting the merged company on track to produce more than 130,000 tonnes of lithium carbonate equivalent (LCE), up from around 40,000 tonnes now, with operational synergies and global diversity to make it a major global player, Spencer added.
Orocobre and Galaxy, which operate the Olaroz and Sal de Vida lithium projects in Argentina, respectively, are looking to consolidate their assets in the country.