US-based chemicals manufacturing company Albemarle has backed out from its A$6.6bn ($4.3bn) takeover proposal for Australian lithium miner Liontown Resources.

According to Albemarle, it has decided to walk away from the pursuit of Liontown because of increasing complexities tied to the execution of the deal.

The decision is in line with its “disciplined approach” to capital allocation, noted the company.

However, the company added that it plans to continue implementing its long-term growth plans, which include focusing on high-return organic and inorganic growth.

Albemarle CEO Kent Masters said: “Our engagement with the Liontown team has been meaningful and productive. We appreciate the level of cooperation we have received, and we thank the entire team for their efforts.

“That said, moving forward with the acquisition, at this time, is not in Albemarle's best interests.”

Albemarle first proposed to acquire Liontown in October 2022, and revised its bid multiple times, finally offering to buy Liontown shares at A$3 apiece.      

Kathleen Valley is Liontown’s flagship lithium project, located 60km from Leinster and 680km from Perth, Western Australia.

This project sits on the western edge of the Norseman-Wiluna Greenstone Belt within the Archaean Yilgarn Craton and hosts lithium mineralisation within spodumene-bearing pegmatite dykes.

Liontown CEO and managing director Tony Ottaviano said: “We acknowledge Albemarle’s decision. They were constructive and respectful throughout the diligence process.

“Notwithstanding, our position to maintain momentum on our base plan has allowed us to keep a line of sight of the first production from the Kathleen Valley Project in mid-2024. The Board remains focused on delivering outstanding performance and value to its stakeholders.”

The latest move by Albemarle comes shortly after mining magnate Gina Rinehart-controlled Hancock Prospecting increased its Liontown holding to 19.9%.

This placed the company in a dominant position to potentially block Albemarle's bid.