  Single-crystal x-ray diffraction studies with synchrotron radiation on the
honeycomb iridate $\alpha$-Li$_{2}$IrO$_{3}$ reveal a pressure-induced
structural phase transition with symmetry lowering from monoclinic to triclinic
at a critical pressure of $P_{c}$ = 3.8 GPa. According to the evolution of the
lattice parameters with pressure, the transition mainly affects the $ab$ plane
and thereby the Ir hexagon network, leading to the formation of Ir--Ir dimers.
These observations are independently predicted and corroborated by our
\textit{ab initio} density functional theory calculations where we find that
the appearance of Ir--Ir dimers at finite pressure is a consequence of a subtle
interplay between magnetism, correlation, spin-orbit coupling, and covalent
bonding. Our results further suggest that at $P_{c}$ the system undergoes a
magnetic collapse. Finally we provide a general picture of competing
interactions for the honeycomb lattices $A_{2}$$M$O$_{3}$ with $A$= Li, Na and
$M$ = Ir, Ru.
