The A$4 billion ($3.1 billion) merger will create the world’s fifth-largest lithium chemicals company, according to the announcement.

Under the agreement, Galaxy shareholders would receive 0.569 Orocobre shares for each Galaxy share, the companies said. Orocobre shareholders will ultimately own 54.2% of the fully diluted share capital of the combined entity and Galaxy shareholders will own the remaining 45.8%.

Martin Rowley, current chairman of Galaxy, would become non-executive chairman of the merged entity, while Robert Hubbard, current chairman of Orocobre, would become deputy chairman. Martín Pérez de Solay, current chief executive officer and managing director of Orocobre, would remain in these roles at the merged entity.

A new name for the merged entity will be selected in due course, both companies said.

“This transaction has the potential to be a significant value-creating opportunity for Galaxy and Orocobre shareholders. The merged entity's growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium,” Rowley said.

“The logic of this merger is compelling. Both Orocobre and Galaxy shareholders, will benefit from the diversification, growth and scale of a top 5 global lithium chemicals company,” Hubbard stated.

“The merger consolidates the combined group’s position in Argentina and will give us significant operational, technical and financial flexibility to deliver the full value of our combined portfolio,” Pérez de Solay said.