The takeover - C$742 million in cash at a hefty premium and supported by Talison's board and controlling shareholder - brings together two of the world's chief lithium producers.

Rockwood, a diversified chemical company, commands about 20 percent of the lithium market, while Talison has even more, about 30 percent of the market, said Paradigm Capital analyst David Davidson said. A spokesperson for Talison and another analyst corroborated the supply picture.

"It creates a major player," Davidson said, noting there are there are only about three or four main players in the lithium market.

Eoin Treacy's view The pace of M&A activity has increased substantially over the last few years as corporate balance sheets have improved. Companies presented with large cash balances have the option of expanding through investing in plant and labour, paying out higher dividends or buying competitors. A considerable number have opted for the latter route in a trend which is evident across a whole range of sectors from health insurers to miners.

Lithium represents an interesting market where there is potential for an oligopoly to emerge. The number of companies with the ability to increase supply is comparatively small and the number of obvious potential resources is also limited by geography. Against a background where demand growth for lithium-ion batteries is likely to continue to expand rapidly, the case for additional upside potential across the lithium mining sector will depend on whether the respective companies attempt to compete with each other to increase supply or whether they withhold supply to support pricing. (Also see Comment of the Day on June 20th).

SQM Corp has been ranging mostly above $50 since early 2011 and is currently testing the upper boundary near $60. A clear downward dynamic would be required for this area to offer anything other than temporary resistance.

FMC Corp found support in the region of the 200-day MA from mid-May and has rallied back to test the peak near $55. A break in the short-term progression of higher reaction lows would be required to question medium-term potential for a successful upward break.

Rockwood Holdings has held a progression of rising major reaction lows since October and the benefit of the doubt can be given to the upside as long as it continues to hold above $40.

Orocobre has been ranging above $1 since October and has rallied to test the upper boundary over the last month. A sustained move below $1.50 would be required to question potential for a successful upward break.

Canada Lithium Corp at approximately half the market cap of Talison also rallied impressively yesterday, potentially on speculation it may also become a takeover candidate. Lithium Americas is even smaller with a market cap of C$89million and has rallied to test the medium-term progression of lower rally highs. Recovery potential can be given the benefit of the doubt provided it holds above the 200-day MA. The pace of M&A activity has increased substantially over the last few years as corporate balance sheets have improved. Companies presented with large cash balances have the option of expanding through investing in plant and labour, paying out higher dividends or buying competitors. A considerable number have opted for the latter route in a trend which is evident across a whole range of sectors from health insurers to miners.

Lithium represents an interesting market where there is potential for an oligopoly to emerge. The number of companies with the ability to increase supply is comparatively small and the number of obvious potential resources is also limited by geography. Against a background where demand growth for lithium-ion batteries is likely to continue to expand rapidly, the case for additional upside potential across the lithium mining sector will depend on whether the respective companies attempt to compete with each other to increase supply or whether they withhold supply to support pricing. (Also see Comment of the Day on June 20th).

SQM Corp has been ranging mostly above $50 since early 2011 and is currently testing the upper boundary near $60. A clear downward dynamic would be required for this area to offer anything other than temporary resistance.

FMC Corp found support in the region of the 200-day MA from mid-May and has rallied back to test the peak near $55. A break in the short-term progression of higher reaction lows would be required to question medium-term potential for a successful upward break.

Rockwood Holdings has held a progression of rising major reaction lows since October and the benefit of the doubt can be given to the upside as long as it continues to hold above $40.

Orocobre has been ranging above $1 since October and has rallied to test the upper boundary over the last month. A sustained move below $1.50 would be required to question potential for a successful upward break.

Canada Lithium Corp at approximately half the market cap of Talison also rallied impressively yesterday, potentially on speculation it may also become a takeover candidate. Lithium Americas is even smaller with a market cap of C$89million and has rallied to test the medium-term progression of lower rally highs. Recovery potential can be given the benefit of the doubt provided it holds above the 200-day MA.