NEW YORK: Lithium companies Allkem Ltd and Livent Corp said on Wednesday they will combine in an all-stock $10.6 billion deal to create the world’s third-largest producer of the metal used to make electric vehicle batteries.

Shares of Livent were up about 5.4% to $25.53 in late morning trading on the New York Stock Exchange. Allkem’s shares closed up nearly 1% on the Sydney Stock Exchange.

Combining US-based Livent and Australia-based Allkem creates an industry powerhouse on four continents that executives hope will bring more heft and skills needed to boost supply of the metal to an increasingly hungry automotive sector, including Tesla Inc, General Motors Co and BMW.

“To develop more lithium projects, you need to be big enough to finance, you need access to resources and you need technical expertise,” Livent CEO Paul Graves said in an interview. “Combining the two companies helps us with all of those areas.”